Minister hears students' fears on youth allowance changes

The Federal Government had ''laid the groundwork for an embarrassing backflip'' on contentious changes to the youth allowance, critics said yesterday.

Deputy Prime Minister Julia Gillard met in Canberra with students from Labor and Independent-held seats, as well as representatives from Universities Australia, the Council of Australian Postgraduate Associations and the National Union of Students.

''I'm aware from discussions I've had with young people around the country as well as the discussion I've had today that there are some concerns about the transition into these new arrangements,'' Ms Gillard said yesterday after meeting affected students .

''I'll seriously consider what's been put to me today.''

There was concern that some students taking a gap-year would miss out on income support at university as a result of the changes.

The Government unveiled plans in the budget to alter criteria for the youth allowance from January 1, 2010.

It was to ease the parental income test, which would mean about 67,800 more people would qualify for student income support and another 34,600 would receive higher payments.

Students would eventually qualify for independent status when 22 years old under plans to progressively lower the age from 25 years.

But the most contentious part involves changes to the workforce participation criteria before students were deemed independent. Students who worked full-time for at least 30 hours a week for 18 months since leaving school would still be considered independent, but those who worked part-time or earned more than $19,532 over the same period would not.

Critics feared students who deferred their studies this year could miss out on income support when they went to university and were calling on the Government to delay the change until January 1, 2011.

National Union of Students president David Barrow said yesterday Ms Gillard had listened and it was now time to act.

''We view a push back of the time line relating to the removal of the workforce eligibility criteria as a positive step that will make the currently proposed package fairer,'' Mr Barrow said.

Opposition education spokesman Christopher Pyne said, ''The Opposition would have welcomed a move today to give gap year students peace of mind. Instead they have been met with the cold indifference we've come to expect from this Minister.''

Greens Senator Sarah Hanson-Young said the Government needed to change the legislation to accommodate students completing their gap-year or the Greens would push for amendments when the Bill was in the Senate.