The Federal Government’s changes to student Youth Allowance will now start taking effect.

“After months of delays in the Senate, it is great to finally be able to say that the Youth Allowance changes are being rolled out,” local MPs Janelle Saffin and Justine Elliot announced.

“The first reforms coming into affect today are the introduction of new scholarships for higher education students receiving Youth Allowance, ABSTUDY or Austudy and the lowering of the Age of Independence from 25 to 24 years.

“The Student Start-up Scholarship is worth $1300 in 2010 and will increase to $2128 plus indexation from 2011 to assist students with up-front costs such as textbooks and equipment.

“The new scholarships will be provided in two annual payments, with students expected to receive their first payment of $650 in a matter of weeks.

“From April 1, some eligible dependent students who have to move away from home to study can apply for a Relocation Scholarship, valued at $4000 in the first year and $1000 in subsequent years.

“In July the new parental income test comes into effect, and that will give thousands more students access to student income support for the first time.

“The Government’s new parental income test arrangements would raise the threshold for working families, allowing parents with two students studying away from home to earn more than $140,000 before their allowance is cut.

“Our new Youth Allowance arrangements will deliver more than 33 times the number of scholarships provided when the National and Liberal Coalition left office.

“Under the previous system, nearly one in five students living at home receiving youth allowance came from families earning above $150,000 and one in ten were from families earning above $200,000. 

“This new system is fairer for working families, for taxpayers and for our community.”

Key features of the program include:

  • From 1 April, 2010, Youth Allowance students will receive a $2128 start-up scholarship every year, indexed for inflation. ($1300 in 2010).
  • From 1 April, 2010, the age of independence will reduce to 24 and will continue to be reduced progressively to 22 years by 2012. This will see an estimated 7,600 new recipients of the independent rate of allowance.
  • From 1 July, 2010, the parental income test thresholds will be increased so families with two children studying away from home can earn more than $140,000 before their allowance is cut completely.
  • Students who live in “very remote”, “remote” and “outer regional” areas as defined by the Australian Bureau of Statistics who have to move away from home to study and whose parents earn less than $150,000 a year will be able to apply for independence under the old work tests.
  • Students who choose to move to study may be eligible for an additional relocation scholarship of $4000 in the first year of study and $1000 each subsequent year.
  • From 1 July 2012, students will be allowed to earn $400 a fortnight (up from $236) without having their payments reduced.