An Innovation and Higher Education System for the 21st Century — 

  • Student Income Support – increase Youth Allowance Parental Income Test threshold
  • Student Income Support – reduction in the age of independence

Key Elements

From 1 January 2010 key features of the Youth Allowance (YA) parental income test will be aligned with the FTB Part A income test.  This will make the YA parental income test more generous.  As a result, it is estimated that around 67,800 FTB Part A children aged 16 to 24 years will be able to receive the higher rate of Youth Allowance as a result of the changes to the YA parental income test.

Also, starting from 1 January 2010 the YA age of independence for full-time students will be lowered from 25 to 22 years, phased in over three years.  The age of independence is the age at which a young person receiving YA automatically becomes subject to a personal income test only and is no longer subject to a parental income test.  It is expected that, over the phase-in period, around 7,900 young people aged 22 to 24 will be better off on YA.

Background

These changes are being made in response to recommendations contained in the December 2008 report of the Bradley Review of Higher Education.  More information about these changes is available in the Department of Education, Employment and Workplace Relations Budget material.

Implementation

Both of these YA measures start on 1 January 2010, with a phased implementation for the reduction in the age of independence.

Total Government Funding

There will be savings of around $547.8 million over the four-year forward estimates period in the FTB Part A program as a result of FTB children becoming eligible for higher Youth Allowance payments.  The offsetting costs of these measures are reported in the Department of Education, Employment and Workplace Relations Portfolio Budget Statement.

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