Student income support Workforce Participation Criterion
Commencing Tuesday 1 July 2010, students receiving Youth Allowance (student) and ABSTUDY will be able to establish financial independence under the workforce participation criterion by demonstrating employment of an average of 30 hours per week for at least 18 months during any period of two years.
This element recognises that young people who have established this work pattern are no longer financially dependent on their parents.
From Tuesday 1 July 2010, the workforce participation criterion for establishing financial independence for Youth Allowance and ABSTUDY is being tightened so that most students will no longer be able to achieve financial independence for Youth Allowance and ABSTUDY by meeting the 2nd and 3rd elements of the workforce participation criterion. These are:
Worked part-time for at least 15 hours a week for at least two years since leaving school; or,
Earned, in an 18-month period since leaving school, an amount equivalent to 75 per cent of the maximum rate
of pay under Wage Level A of the Australian Pay and Classification Scale generally applicable to trainees (in 2010 this requires earnings of $19 532).
These elements of the criterion have allowed some students from higher income backgrounds to access student income support. In line with the recommendations of the Bradley Review of Australian Higher Education, this measure will target student income support more effectively to students from low income backgrounds.
This arrangement will apply to students on income support, including Youth Allowance and ABSTUDY. It will also extend to recipients of Youth Allowance (other).
In addition to the tightened workforce participation criterion, Youth Allowance will continue to recognise that some
young people will establish independence through meeting the individual circumstances such as having, or having
had, a dependent child; or being in a situation that makes it “unreasonable to live at home” due to extreme family
breakdown, violence in the home, or serious threats to health or wellbeing. For more information visit the Centrelink website.
Removing financial barriers
This measure is part of the reforms to student income support which aim to ensure that financial barriers to the participation of students from low socio economic backgrounds are removed. The reforms aim to target support more effectively to those who need it most, including those from regional and remote areas and Indigenous students.
While some young people will no longer be eligible for independence under the workforce participation criterion,
many students are expected to be eligible to receive Youth Allowance or ABSTUDY as a result of changes to the parental income test and the age of independence. The parental income test will become the main criterion for eligibility for Youth Allowance and ABSTUDY.
All existing student income support recipients as at Wednesday 30 June 2010 will be ‘grandfathered’ so that no existing recipient will be disadvantaged by this change.
Transitional arrangements for 2009 ‘gap year’ students
Transitional arrangements will allow young people who completed Year 12 in 2008, took a ‘gap year’ in 2009 and start university during 2010, until 31 December 2010 to meet the current workforce participation criterion for independence under Youth Allowance and ABSTUDY, on condition that:
They will be required to live away from home to study at university; or
Their parents’ combined income is less than $150 000 for the tax year.
Students who completed Year 12 in 2009 and are currently taking a gap year before commencing university should be aware that these transitional arrangements will not apply to them.
Special arrangements for students disadvantaged by distance
For young people from rural areas who because of the geographical location of their family home are required to
relocate for full-time study, effective from Saturday 1 January 2011, the three elements of the workforce participation criterion for independence will apply for Youth Allowance (student) and ABSTUDY.
These young people will be able to qualify under any of the three elements of the workforce participation criterion for
independence, including through earnings accrued over a period of at least 18 months since leaving school, where:
Their family home is in a location categorised under the Australian Standard Geographical Classification (ASGC)
as Outer Regional Australia, Remote Australia or Very Remote Australia; and
Their parents’ income is less than $150 000 per annum.
Related changes that affect eligibility for Payments
Many students who will not be eligible for Youth Allowance or ABSTUDY because of the tightened workforce participation criterion for independence, are expected to automatically qualify as dependent recipients under the provisions of the new Parental Income Test from Thursday 1 July 2010 included as part of the reforms to student income support. As a result of the increased parental income cut off points—for example:
A student living at home aged 18 or more will be eligible with a family income of over $76 000.
A student studying away from home will be eligible with a family income of over $93 000.
A family with two children on Youth Allowance aged 18 and 20 at home will be eligible with a family income of
over $108 000.
A family with two children studying away from home will be eligible for Youth Allowance with a family income
of over $142 000.
For more information, see the Fact Sheet on the Parental Income Test.
In addition more students will be eligible for student income support as a result of the initiative to progressively lower the Age of Independence from 25 years to 24 years in April 2010, 23 years in January 2011 and 22 years in January 2012.
For more information, see the Fact Sheet on the Age of Independence.
Implementation
The change to the workforce participation criterion will take effect from Thursday 1 July 2010.
Transitional arrangements for 2009 ‘gap year’ students will be in place until Friday 31 December 2010.
Special arrangements for students disadvantaged by distance who move to study will take effect from Thursday 1 January 2011.
For more information visit the Department of education, employment and work relations website.
