The value of farms and trusts will no longer be counted in assessments of eligibility for youth allowance, meaning more dependent students who live away from home could qualify for the payment which is worth up to $426.80 a fortnight.
National party senator Bridget McKenzie said the removal of the family assets test and the family actual means test would allow 4,100 more young people to claim the allowance.
She said students from farming families were generally “asset rich but cash poor”.
“Treating the family farm as income is completely illogical and while many of our farming families have significant assets on paper, this does not translate to their bank balance,” McKenzie said.
“Cash poor farmers cannot be expected to sell a paddock or go into more debt to fund the full extent of relocating their children to attend university, which costs anywhere from $15,000 to $20,000 a year for each child.”
The existing family assets test does not include the family home in the test but gives a 75% discount for business and farm assets. Students could not receive youth allowance if their family’s assets exceeded the threshold of $661,250.
The existing family actual means test required details of all personal spending and savings by parents and all dependent family members to be supplied.
In Tuesday’s budget, the Coalition announced that from 1 January 2016 families with dependent children receiving income support payments would be subject to the family tax benefit part A parental income test arrangements. As a result, the family assets test and the family actual means test were removed to give “a more consistent level of support for families”.
The change applies to payments including youth allowance, ABSTUDY living allowance and assistance for isolated children scheme and will cost $262.7m over five years.
McKenzie said while the changes were positive, there was still a gap between city and country students.
“It is deeply concerning to me that while 27% of the population live in regional and rural communities, they only make 21% of our university population,” she said.
