House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Skills and Training, the Hon Andrew Giles MP)

OUTLINE

The VET Student Loans (Miscellaneous Measures) Bill 2025 (the Bill) ensures that approved VET Student Loans (VSL) providers were authorised to handle student's tax file numbers (TFNs) to administer the VSL program from the program's commencement but are not authorised to do so from 1 October 2025.

During a review of how VET Student Loans are administered the Department of Employment and Workplace Relations (the department) identified that there is no clear role for VSL providers to handle TFNs in the VET Student Loans Act 2016 (VSL Act) and stronger alignment between relevant IT systems and legislation was required for handling TFNs.

The measure in this Bill is time limited and is applied retrospectively from the VSL program commencement date (1 January 2017) until updates to IT systems were implemented to completely mask TFNs from providers in relevant systems. This has occurred before 1 October 2025, and the Bill sets this date as the end date of the retrospective period.

The Bill would authorise, on a retrospective basis, approved VSL providers' historical activities that involved requiring or requesting, collecting, recording, storing, using and disclosing student tax file numbers (TFNs) for the purposes of facilitating the administration of or administering a student's application for a VET Student Loan or the student's loan itself. The measure would also authorise the Department of Employment and Workplace Relations' (department) retrospective disclosure of TFNs to VSL providers for the same purposes.

The VSL Act provides the legislative framework and requirements for the VSL program, with which approved VSL providers must comply. The VSL Act also outlines the students' eligibility criteria to access a loan, and the requirements providers must meet to be approved under the program. Students are required under paragraph 17(1)(a) of the VSL Act to provide their TFN when submitting their application for a loan for a VSL course that they enrolled in with their approved VSL provider through the Electronic Commonwealth Assistance Form (eCAF) system. If a student does not have a TFN, they can supply a Certificate of Application for a TFN received from the Australian Taxation Office (ATO) when applying for the loan. However, if no TFN information is provided by the student the Secretary is not required to pay a loan amount for the student under section 20 of the VSL Act.

A TFN is essential for ensuring the student's loan application details match with their ATO account, so that the loan amount accurately sits with the individual accessing a VET Student Loan. This is because loan repayments are made through Australia's tax system when the student's income reaches the repayment threshold.

VSL provider officers have access to the eCAF system and were previously able to access student TFNs in the eCAF until system changes were implemented on 28 March 2025. This previous access to TFNs enabled VSL providers to use, record and disclose TFNs for the purpose of student participation in VSL approved courses and the VSL program. This previous practice allowed VSL providers to report student TFNs to the department via the Tertiary Collection of Student Information (TCSI) system, allowing loan information to progress to the ATO and student debts to be repaid.

The department has since early 2025 made updates to relevant VSL IT systems. This has included masking student TFNs from VSL providers and automating the transfer of TFNs between relevant VSL systems without provider involvement. While progressing these updates, relevant stakeholders were informed, including VSL providers, the Office of the Australian Information Commissioner, the Commissioner of Taxation, the Commonwealth Ombudsman, the Department of Treasury and the Attorney-General's Department.

Final system changes were implemented on 30 September 2025 to ensure there will be no further disclosure of TFNs to VSL providers, nor any need for the subsequent handling of such TFNs by VSL providers. Therefore, the measure in this Bill is only required to validate previous actions (the requiring or requesting, collecting, recording, storing, use or disclosure of a student's tax file number in eCAF and TCSI systems) by the providers and their officers that have occurred in the retrospective period for the limited purposes set out in the Bill.

The validation will also extend to other relevant persons including the department's Secretary, the Commissioner of Taxation and Commonwealth officers to the extent they permitted the past disclosure of TFNs to providers for the purposes of facilitating the administration of a student's loan application or a VET Student Loan. The Bill's measure provides certainty to providers and government officers that their past handling of students' TFNs in the VSL program from 2017 was lawful under taxation and privacy laws. However, the measure will not impact on Commonwealth officers' obligations to comply with the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and Public Service Act 1999 (PS Act).

It is appropriate to authorise relevant persons' past handling of TFNs given their actions were undertaken in good faith to enable students to access loans through the VET Student Loans program, by facilitating the administration of or administering the students' applications for a VET Student Loan or the loan itself.

There are unlikely to be any persons adversely affected by the retrospective operation of the Bill. There have also been no VSL student complaints as a result of past TFN handling practices for the purposes of the VSL program, since its commencement.

There are strict use and disclosure provisions that apply to VET information under the VSL Act, which VSL providers must comply with. Providers have been subject to these information security and integrity safeguards since the VSL program commenced. These measures include extensive approval processes informed by thorough assessment of providers and their officers with the program's fit and proper person requirements, which are aligned to similar requirements applied by the Australian Skills Quality Authority to Registered Training Organisations. Conditions of approval in accordance with the VSL Act also require providers to notify the department of any student related data breaches and outline criminal offences for any unauthorised handling of student information. In addition, the eCAF and TCSI systems incorporate security controls designed to safeguard students' personal information. These protections will continue to apply after the Bill's commencement.

FINANCIAL IMPACT STATEMENT

There is no financial impact resulting from the Bill.