Kevin Andrews (Menzies, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

This bill will reintroduce, with certain modifications, two measures relating to student entitlements that were originally announced by the previous government in the 2012-13 Mid-Year Economic and Fiscal Outlook and the 2013-14 budget.

The two measures were removed from the Social Services and Other Legislation Amendment Act 2014 during its passage through the Senate in March 2014.

Interest charge

The bill will allow for an interest charge to be applied to certain debts incurred by recipients of Austudy payment, fares allowance, youth allowance for full-time students and apprentices, and Abstudy living allowance.

The interest charge will only be applied, from 1 January 2015, where the debtor does not have or is not honouring an acceptable repayment arrangement.

At present, current recipients of income support with debts have their payments reduced until their debts are repaid. For former recipients of income support, on the other hand, there is no incentive to repay their debts.

Debtors who are already making repayments, or who come to a repayment agreement with the Department of Human Services following implementation of the measure, will not be charged interest.

The key purpose of the interest charge is to encourage debtors to repay their debt, in a timely fashion, where they have the financial capacity to do so.

Once the interest charge is in place, debtors who have not been making repayments will have an incentive to engage with the Department of Human Services to make a repayment arrangement in order to avoid the interest charge.

The rate of the interest charge will be based upon on the 90-day bank accepted bill rate, plus an additional seven per cent, as is currently applied by the Australian Taxation Office for tax debts under the Taxation Administration Act 1953. Over the last four years, this rate has averaged approximately 10.9 per cent, and currently stands at 9.69 per cent for the quarter July to September 2014.

Student Start-up Loans

From 1 January 2015, the bill replaces the current student start-up scholarship with an income-contingent loan, the student start-up loan. The student start-up loan aims to help students with the costs of study, including the purchase of text books, computers and internet access.

Under the new arrangements, there will be a limit of two start-up loans per year, of equivalent value to the student start-up scholarship (currently $1,025 each and to be indexed from 2017).

The loans will be available on a voluntary basis, and will be repayable under similar arrangements to Higher Education Loan Program debts.

Students will only be required to begin repaying their student start-up loan after their Higher Education Loan Program debt has been repaid.

In a departure from the measure introduced in the Social Services and Other Legislation Amendment Bill 2013 (a departure arising from the 2014-15 budget), there will be no grandfathering arrangements for students who had previously received a student start-up scholarship prior to the commencement of the new provisions.

I commend the bill to the House.

Debate adjourned.