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Labor 2013-14 Budget Savings (Measures No. 2) Bill 2015

Revised Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Scott Morrison MP)
This memorandum takes account of amendments made by the House of Representatives to the bill as introduced


This Bill re-introduces, with certain modifications, two measures that were originally announced by the previous government in the 2013-14 Budget.

Schedule 1 - Student start-up loans

Schedule 1 to the Bill replaces, from the first 1 January after Royal Assent, the current student start-up scholarship with an income-contingent loan, the student start-up loan (SSL). The amendments introduce a limit of two loans per year of equivalent value to the student start-up scholarship (currently $1,025 each and to be indexed from 1 January 2017). The loans are available on a voluntary basis, and are repayable under similar arrangements to Higher Education Loan Programme debts. Students are only required to begin repaying their student start-up loan after their Higher Education Loan Programme debt has been repaid.

Schedule 1 to the Bill also provides grandfathering arrangements so that recipients who received a student start-up scholarship or Commonwealth Education Costs Scholarship prior to this Schedule taking effect, and have remained continuously on student payments, will continue to be eligible to receive the student start-up scholarship, whilst they continue to be in receipt of student payments.

Schedules 3 and 4 - Removal of the upfront payment discount and voluntary repayment bonus

Schedule 3 to the Bill amends HESA to remove the HECS-HELP up-front payment discount. Currently, a 10 per cent discount is applied to up-front student contribution payments of $500 or more. The amount of the discount is paid by the Government to the student's higher education provider. As a result of these amendments, a person will not receive the HECS-HELP up-front payment discount for a payment made in relation to a unit of study with a census date on or after 1 January 2017.

Schedule 4 to the Bill amends HESA to remove the HELP voluntary repayment bonus. The voluntary repayment bonus currently reduces a person's HELP debt by an additional 5 per cent of the payment amount when the person makes a voluntary repayment of $500 or more. As a result of these amendments, a person will not receive the HELP voluntary repayment bonus for voluntary payments made on or after 1 January 2017.

Similar amendments were previously introduced to Parliament in the Higher Education Support Amendment (Savings and Other Measures) Bill 2013, which has not passed the Senate.

Statement of compatibility with human rights

The statement of compatibility with human rights appears at the end of this explanatory memorandum.

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