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House of Representatives

Social Security Amendment (Extension of Youth Allowance and Austudy Eligibility to New Apprentices) Bill 2005

Explanatory Memorandum

(Circulated by authority of the Minister for Vocational and Technical Education the Honourable Gary Hardgrave MP)

Outline and financial impact

Outline

This Bill gives effect to a Government election commitment to extend eligibility for Youth Allowance and Austudy payment to full-time New Apprentices. Under this Bill, all New Apprentice claimants will be subject to parental, personal and partner means testing according to their circumstances and consistent with current provisions for full-time students receiving Youth Allowance and Austudy payment. Part-time and schools-based New Apprentices are already able to qualify for Youth Allowance.

The extension of assistance to New Apprentices will provide extra help during the initial years of training while wages are generally at their lowest. As an apprentice or trainee's wages will increase as they progress through their New Apprenticeship, the amount of assistance that they qualify for will progressively decrease according to the application of the personal income test.

The Bill also exempts the value of the Commonwealth Trade Learning Scholarships and Tools for your Trade initiative from assessment as income under the Social Security Act 1991 and the Veterans' Entitlements Act 1986 and exempts the value of the Commonwealth Trade Learning Scholarships from assessment as income under the Income Tax Assessment Act 1997.

Financial impact

Schedule 1

Net outlays of $383.2 million over three years.

Schedule 2

It is not possible to estimate the financial impact of the exemptions as this will be determined by the personal circumstances of New Apprentices and the number of Youth Allowance, Austudy payment or ABSTUDY New Apprenticeship recipients who qualify for assistance under the Tools for your Trade initiative and the Commonwealth Trade Learning Scholarships.

The total amounts expected to be appropriated for the Tools for your Trade initiative and the Commonwealth Trade Learning Scholarships is $84 million and $73.9 respectively over the next three financial years.


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