Australian Democrats' Higher Education Spokesperson Senator Natasha Stott Despoja today introduced legislation to ensure disadvantaged students receive the full benefit of their scholarships.
"My bill would remove anomalies in the treatment of scholarships by the Tax Office and Centrelink which severely diminish the benefits students gain from them," Senator Stott Despoja said.
"It abolishes the distinction between part-time and full-time scholarships, to make all scholarships tax free, and ensures university cash scholarships are not subject to the Social Security income test."
The Democrats previously ensured the income tax exemption of full-time scholarships was maintained, but part-time scholarships are currently taxed. Senator Stott Despoja's bill addresses this, by extending the tax exemption to part-time scholarships (1).
The bill also removes the distinction between Commonwealth Learning Scholarships (CLS) and university-based cash scholarships.
Overwhelming evidence presented to the Democrat-initiated Senate inquiry into student income support (due to report on Thursday) found these issues were placing a significant burden on students.
When asked about the differential treatment of CLS versus other university and community scholarships, Professor George of the University of South Australia, told a Senate Committee:
'It is insaneIt does not make any logical sense to give money and take money. We have tried to warn students, If you accept this money, it may have an effect. You have to find that out. We do not know what your other income is. There is that issue about them having to choose not to take a scholarship. It blows your mind!' (2)
"Unlike the Government, the Democrats have long acknowledged the importance of student income support measures in increasing the participation of students from low socio-economic backgrounds," Senator Stott Despoja said.
"The challenge now is for the Government and Labor to decide whether they are content to allow students living below the poverty line to continue to lose crucial scholarship funds when they are granted a cash or part-time scholarship from a university," Senator Stott Despoja said.
(1) If they satisfy the same criteria as the tax-exempt full-time scholarships
(2) EWRE Committee Hansard, 28 April 2005, p.36
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