Stimulus Package and Bradley Highlight Inequities in Student Income Support
Inconsistencies in the Federal Government’s proposed Household Stimulus Package highlight the anomalous student income arrangements in place for Australia’s 270,000+ postgraduate students.
Postgraduates to miss out on Training and Learning Bonus
“For the vast majority of postgraduates, being excluded from access to student income support in this case also means missing out on the Household Stimulus Package, and the Training and Learning Bonus in particular” CAPA President, Nigel Palmer said.
“About 440,000 of the 645,285 tertiary students potentially eligible can look forward to a $950 Training and Learning Bonus this year, but very few of those will be postgraduate students.”
Eligibility for the Training and Learning Bonus, part of the Federal Government’s proposed Household Stimulus Package, is determined largely by existing eligibility for student income support. As illustrated below, the vast majority of postgraduates will miss out on the $950 Bonus because they cannot even apply for Youth Allowance or Austudy.
$950 Tax Bonus: Many research students to miss out twice
In addition to being excluded from the Training and Learning Bonus, research students with tax-exempt scholarships or stipends again look likely to miss out on the stimulus package when it comes to the $950 Tax Bonus for Working Australians. To be eligible for the Tax Bonus you must declare a net tax liability after deductions for the 2007-08 financial year. Although research students pay tax on any part time earnings, only those who declare a taxable income well in excess of $6,000 would be in the running for the Tax Bonus.
“The Tax Bonus here seems to reward research postgraduates who are able to earn more, not less. Also strange is that this is the first time I think that postgraduates would consider having to pay tax on their part time scholarship or award (literally) as a bonus” CAPA President, Nigel Palmer said.
Depending on deductions, research students in receipt of a part time award (with a 2007-2008 rate of around $10,000) would be eligible for the $950 Tax Bonus, as part time awards are taxable. Full time award recipients on the other hand would need to declare significant taxable earning in addition to their award to be eligible, ruling out many who are dependent on casual teaching to supplement their income at chronically low effective rates of pay.
“The Household Stimulus Package highlights the mess student income support arrangements are in. In the short term, we call on the Government to amend the package to include administrative measures to ensure the Training and Learning Bonus is available to all students, including those that are excluded from the package as currently proposed. From there, the need for comprehensive student income support reform is obvious, and overdue.”
Bradley Overlooks Coursework Doctorates and many Research Students in Proposed Reforms
Many had hoped that the ‘Bradley’ Review of Australian Higher Education would outline the path to comprehensive student income support reform.
As indicated above, however, recommendations in the Bradley Review Final Report overlook an estimated 22,352 students, including over 20,000 research postgraduates who would be left without access to any form of income support at all, and completely omitting coursework doctorate students from consideration. Also missing from the Report is any discussion of extending the duration of student income support entitlement for coursework postgraduates, without which improvements in eligibility conditions would be of little value for many.
“In a report that invests so much in talking about equity, it seems strange that the Review would provide for new inequities through either error or neglect. We are confident that the Federal Government will take into account these and other omissions from the Report in considering its response” CAPA President, Nigel Palmer said.
CAPA Recommends:
- That the Household Stimulus Package be amended to ensure all students have access to the proposed Training and Learning Bonus.
- That the Household Stimulus Package be amended to ensure those declaring very low taxable incomes are not excluded from the proposed $950 Tax Bonus for Working Australians.
- That in line with current stimulus measures the Federal Government ensure comprehensive student income support reform remains a priority for the May 2009 Federal Budget.
“Should the viability of the Household Stimulus Package be in doubt or not, we urge the Government to immediately invest stimulus funding in comprehensive student income support reform – starting with those who are currently excluded altogether. As our submissions to various reviews and inquiries have clearly demonstrated, this is an area where many students are already experiencing acute financial stress. All students should have access to income support of one form or another.
“We are confident that the Federal Government is sensitive to these concerns, and we are optimistic that the Government will seize on the opportunities before it to address areas of critical need and to enact genuine long term reforms” CAPA President, Nigel Palmer concluded.