Student Income Support Reforms

The Australian Government has changed student income support – ABSTUDY, Austudy and Youth Allowance - to create a fairer system for more students and to ensure increased support for those who need it most.

The changes will particularly benefit students from low socioeconomic backgrounds and regional students who have to move away from home to study. The changes support the Government’s target that by 2025, 40 per cent of 25 to 34 year olds will hold a bachelor degree or higher and give more people a chance to participate in higher education.

Student Income Support Reforms 2012

The Review of Student Income Support Reforms reported to the Government on 8 July 2011.  The report of the Review was tabled in Parliament on 14 September 2011. The Government’s response, which was announced on 14 September 2011 provides additional support to young people from regional areas who need to move away from home to study, while maintaining an emphasis on assisting students from low socioeconomic backgrounds. The changes recognise the additional barriers and costs faced by young people from regional Australia in accessing education.

Legislation giving effect to the reforms was passed by the Parliament in November 2011. The reforms are outlined below.

An advertising campaign in late 2011 and early 2012 targeted regional students and their families to provide information about the changes to student income support from 1 January 2012. Campaign materials for regional young people and their families from the Regional Student Income Support Campaign are available on this website.

Workforce participation criteria for Inner Regional students

From 1 January 2012, the special workforce participation independence arrangements for ABSTUDY and Youth Allowance that applied to students from Outer Regional, Remote and Very Remote areas was extended to students from Inner Regional areas.

This delivers on the Government’s commitment to remove eligibility distinctions between Inner Regional and Outer Regional students and recognises the need for greater assistance for young people from regional areas who need to live away from home to participate in study.

Relocation Scholarship

In order to provide extra support for young people from regional Australia who need to relocate to access higher education, the value of Relocation Scholarship payments has been reset as outlined below:

  • for eligible students from regional areas, the 2013 values are $4048 in the first year they are required to live away from home to study, $2024 in each of the second and third years and $1012 in any subsequent years of study (indexed annually);
  • for eligible students from major cities, the 2013 values are $4048 in the first year of living away and $1012 in subsequent years of study (indexed annually).

Student Start-up Scholarship

In 2013 the value of the Student Start-up Scholarship is $1025 per half-yearly instalment ($2050 per annum). 

The Rural Tertiary Hardship Fund

The Rural Tertiary Hardship Fund has ceased.

Masters by coursework

The extension of student income support to all Masters by coursework students has been deferred until 1 January 2017.

More information on each of the 2012 student income support reforms is provided on the Questions and Answers page.

Other upcoming changes to student income support

In March 2010, legislation to give effect to the Australian Government’s comprehensive reforms to student income support was passed by the Parliament. The reforms, which were in response to the recommendations of the Bradley Review of Australian Higher Education, increased access to, and better targeted, income support for students who need it most, through a fairer and more equitable allocation of existing resources. The full Review of Australian Higher Education Report and the Government response are available online. The student income support reforms were designed for implementation over a four year period, the first of which commenced on 1 April 2010. All except one of the measures are now fully implemented as outlined below.

Extending student income support for coursework masters

From 1 January 2017, eligible students enrolled in all Masters by Coursework programs will be able to receive Austudy, Youth Allowance, and the Pensioner Education Supplement.

Reforms implemented in 2010, 2011 and 2012

Parental Income Test threshold raised

From 1 July 2010, the Parental Income threshold for dependent students to receive the maximum rate of ABSTUDY or Youth Allowance increased from the previous $33 300 to $44 165. The threshold, which is indexed each year, increased to $47 815 on 1 January 2013. This means that more students are entitled to ABSTUDY or Youth Allowance and many students already being paid ABSTUDY or Youth Allowance are receiving more support.

Student Start-up Scholarship

From 1 April 2010, all higher education students receiving student income support receive Student Start-up Scholarship payments to assist with the costs of participating in higher education. In 2013, the value of the scholarship is $1025 per half-yearly instalment ($2050 per annum). 

Relocation Scholarship

From 1 April 2010, eligible higher education students receiving student income support who have to relocate to study received an annual Relocation Scholarship payment to assist with the costs of establishing accommodation.

In 2012, the value of Relocation Scholarship payments were reset in order to provide extra support for students from regional areas:

  • for eligible students from regional areas, the 2013 values are $4048 in the first year they are required to live away from home to study, $2024 in each of the second and third years and $1012 in any subsequent years of study
  • for eligible students from major cities, the 2013 values are $4000 in the first year of living away and $1000 in subsequent years of study
  • The values of the Relocation Scholarship are indexed on 1 January each year.

Lowering the age of independence

The age of independence has been gradually reduced from 25 to 22 years, meaning more students will be eligible for ABSTUDY or Youth Allowance. The age of independence was reduced to 24 years on 1 April 2010, to 23 years on 1 January 2011 and to 22 years on 1 January 2012.

Workforce Participation Criteria for Independence

Since 1 July 2010, a young person can demonstrate financial independence through workforce participation if they have worked full-time for an average of 30 hours or more per week for at least 18 months in a two-year period.

This ensured that support is targeted to students most in need of assistance. Many students no longer eligible under the changed criterion are automatically eligible as a result of the increased parental income test.

Since 1 January 2011, young people from outer regional and remote areas have been able to demonstrate financial independence through working if they have either:

  • Worked part-time for at least 15 hours a week for at least two years since leaving school; or
  • Earned at least 75 per cent of Wage Level A of the National Training Wage Schedule included in a modern award in an 18 month period since leaving school ($21 009 up to 30 June 2012, $21 618 from 1 July 2012).

In addition:

  • their family home must be in a location categorised under the Australian Standard Geographical Classification (ASGC) as Outer Regional Australia, Remote Australia or Very Remote Australia, and
  • their parents’ income must be less than $150 000 per annum.

From 1 January 2012, these special workforce participation arrangements were extended to students from inner regional areas.

These changes to the workforce participation criteria for independence ensure that available support is targeted to students most in need of assistance. Many students who cannot access independence under the new regional arrangements are able to qualify for assistance as a dependent young person as a result of the 1 July 2010 changes to the Parental Income Test.

Raising the personal income threshold

From 1 July 2013, the personal income threshold increased so that students receiving support are able to earn up to $405 per fortnight without having their payments reduced. If a student earns less than $405 in a fortnight, the Student Income Bank allows the difference to accrue as credit to offset income in fortnights where more than $405 is earned. The Student Income Bank increased to $10 100 on 1 January 2013. The personal income and Student Income Bank thresholds are both indexed annually on 1 January to the Consumer Price Index (CPI).

Eligibility for Youth Allowance and ABSTUDY depends on a young person’s individual and family circumstances. For more information on how the changes impact you, or to make a claim for payment, visit www.humanservices.gov.au or call 13 2490. To talk to the Department of Human Services (Centrelink) about ABSTUDY or to make a claim for ABSTUDY, call Freecall™ 1800 132 317.

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