House of Representatives

Higher Education Support Amendment Bill (No. 1) 2012

Second Reading Speech

The Higher Education Support Amendment Bill (No. 1) 2012 clarifies the application and operation of indexation arrangements in the Higher Education Support Act 2003. It updates the definitions for 'course of study in dentistry' and 'course of study in veterinary science' and updates the Melbourne College of Divinity's name in light of its approval to operate under the title MCD University of Divinity.

The Bill also allows for technical amendments to the calculation of the voluntary repayment bonus to resolve rounding issues. There is ambiguity in the Act about the application of the indexation

provisions to amounts in the Act on 1 January 2011. The Government is making it clear that indexation should have been applied to amounts in the Act on 1 January 2011, and that the amounts that are indexed on 1 January 2012 are the 2011 indexed amounts.

The terms 'Course of Study in Dentistry' and 'Course of study in Veterinary Science' are used to determine which students are eligible for the higher FEE-HELP limit of $112,132 in 2012.

The Bill would amend the definitions for 'course of study in dentistry' and 'course of study in veterinary science' to clarify that only students undertaking courses of study in dentistry or veterinary science that satisfy the minimum academic requirements for registration as a dentist, veterinary surgeon or veterinary practitioner are eligible for the higher FEE-HELP limit.

The Melbourne College of Divinity has been approved by the Victorian Registration and Qualifications Authority to operate under the name MCD University of Divinity until 31 December 2016.

Students can make a voluntary repayment towards their HELP debt to the Tax Office at any time. Voluntary repayments of $500 or more currently attract a 5 per cent bonus on the payment amount.

When calculating the effect of a person making a voluntary repayment of his or her HELP debt, the Act provides for a person to obtain a 5 per cent bonus and includes rounding rules in calculating whether a person has repaid their debt and the amount of debt repaid if it is only a partial repayment.

Currently, the effect of the rounding rules is that:

(a)
When making a full repayment, the person benefits from the rounding because the amount of payment required to pay off their debt in full is reduced because the cents are rounded down; and
(b)
When making a partial repayment, the person is disadvantaged because the value of the reduction to the outstanding debt due to a payment is rounded down.

The Bill amends the Act to provide that when calculating the effect of a person making a partial repayment towards his or her HELP debt, the amount would be rounded up to nearest dollar. The cents would continue to be rounded down to determine the amount required for the full repayment of a person's HELP debt amount. Effectively, the rounding rules will now always benefit a person making a voluntary repayment.

The Bill reflects the Government's continued commitment to improving Australia's higher education sector and expanding opportunities for Australians to obtain a high quality higher education.


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