Student Loan Scheme Bill

I wish to advise members that this is a debate on clauses 25 to 109, and it also includes debate on schedules 2 through to 4.

I will raise some questions about exactly those clauses that you have helpfully outlined for the Committee, which we are looking at now.

💬 Hon Ruth Dyson: Is that Part 2?

It is Part 2, I say to Ms Dyson; yes, it is. I have a question for the Minister in the chair, the Minister of Revenue, and I hope he will answer this one, because it is a genuine question. In the first reading and during the select committee process on the Student Loan Scheme Bill a number of concerns were raised about the change in assessment for people who earn money while they are on the student loan scheme, in terms of what they have to pay back. I was not on the Finance and Expenditure Committee, but my reading is that a number of those concerns have been dealt with in the changes that have been made to Part 2.

In particular, when we look at clause 48, we see that there is now a change to the definitions relating to the exemptions for full-time students. As I read the change in clause 48, essentially it is trying to say that if a student works intensively in a holiday period and, at that point, earns more than the repayment threshold, which currently would be $367 per week, then returns to being a student, they will be assessed on their whole year’s income rather than the period in which they earned that money.

That change would resolve a significant concern raised by a number of people in the process of this bill coming to the House, which was that there would effectively be a penalty on people who were trying to earn some money during their holiday period rather than having to work extensively through term time. Of course, as many members of the Committee will know, people’s studies are potentially put at risk if they have to work too many part-time hours. As I think I noted in an earlier intervention, the commentary on the bill also talks about the fact that it may lead to people unnecessarily borrowing money. That is a different way of looking at the same concern, so I am just seeking the Minister’s guidance on that point.

Related to that issue, I ask whether the changes that have been made in clause 76, and which go on from there, address the concerns that were raised about whether moving from a full-year assessment to a pay-period assessment will penalise people who earn small amounts of money but then, perhaps in blocks, earn larger amounts of money. I ask whether they will then end up having to pay money back, when in fact their total income will not reach the $19,000 figure. That is the specific question that I have.

I was not expecting there to be such a short call on this part. Can I simply respond very quickly to the points the member has made. I simply answer yes in respect of both clauses. The position with regard to the changes introduced in clause 48 is that if, within that period, borrowers are above the $367 threshold, then the member’s interpretation is absolutely correct, but with the proviso that of course they do not breach the $19,084 threshold. The provisions that follow from clause 76 merely give effect to that. So the short answer to his question, on both counts, is yes.

Part 2 agreed to.

Part 3 Excess repayments