Youth Allowance and Austudy

Youth Allowance

Eligibility (ss7, 540)

Youth Allowance is generally for people aged 16-24 who satisfy the activity test or people temporarily incapacitated for full-time study aged 21-24. People over 25 may be eligible if they were receiving Youth Allowance as an Australian Apprentice or student before they turned 25 and continue in that course or apprenticeship. A person who is 15 may also be eligible for Youth Allowance if they are independent. Exemptions from the full-time study requirement apply (see below).

The person must be an Australian resident (or exempt resident) and in Australia to receive Youth Allowance.

The activity test is satisfied if the applicant:

• is undertaking full-time study;
• is undertaking approved full-time training;
• is seeking and willing to undertake paid work (if they are not an early school leaver);
• is a carer of a child and the applicant meets the Secretary’s requirements;
• is complying with an Employment Pathway Plan, and is either:
• an early school leaver;
• in a class of persons specified by Centrelink; or
• is determined by Centrelink to be taken to satisfy the activity test.

if the person complies with a Centrelink notice to do paid work, participate in a program of work or participate in a training program.

A person under 21 years old who does not have a Year 12 or equivalent qualification will usually need to participate in education or full-time training, or participate full-time (25 hours a week) in part-time study or training, in combination with other approved activities. If a person under 21 has a partial capacity to work, they may also be eligible for a Youth Disability Supplement.

Payment of Youth Allowance is subject to waiting periods similar to those for Newstart Allowance (see: “Waiting periods” under “Newstart Allowance“, below). Failure to comply with the activity test or Youth Allowance Employment Pathway Plan may result in a penalty being imposed. The penalties are the same as for Newstart Allowance (see below).

Under 18-year-olds (s543A)

Sixteen- and seventeen-year-olds who do not have the equivalent of Year 12 education normally have to undertake full-time education or training to receive Youth Allowance. However, they may be exempted for the following reasons:

• illness or being within six weeks of pregnancy;
• homelessness;
• in a state of personal crisis, or is a refugee (in some circumstances);
• part-time work and/or education of at least 20 hours per week;
• losing a job;
• disability or learning difficulties;
• inability to obtain an education place;
• a drug problem; or
• inability to undertake full-time study.

For the purposes of determining the correct rate and the application of parental means testing, a young person is classified as: dependent at home; dependent and required to live away from home; or independent.

Required to live away from home

A young person (that is, someone aged from 18 to under 25) is classified as required to live away from home (s1067D) if they:

• are not independent;
• do not live at the home of a parent; and
• need to live away from home for education, training or employment, or their prospects are significantly increased if they live away from home.

Independent

A young person is independent (s1067A) if they:

• are an orphan;
• are a refugee not wholly or substantially dependent on someone else and without a parent living in Australia;
• are self-supporting due to an employment history as defined in the legislation;
• have an employment history as defined in the legislation, are unsupported, and are disadvantaged in relation to employment or education;
• are a member of a couple;
• have a dependent child;
• have parents who cannot exercise their responsibilities;
• are in state care; or
• cannot live at home, due to extreme family breakdown, serious risk to physical or mental well-being due to violence, sexual abuse or other unreasonable circumstances, lack of stable accommodation; and are not receiving continuous support, whether financial or other, from a parent, guardian, or the state.

Rate of Allowance (Part 3.5)

Youth Allowance is paid subject to:

• the parental and personal means test (unless the person is independent); or
• the personal means test (if the person is independent and single); or
• the partner and personal means test (if the person is independent and a member of a couple).

The parental means test applies to dependent young persons, including those required to live away from home. From 1 July 2012 the rate reduces by 20 cents for every $1 the parent’s income exceeds $46,355. There is also an asset test and family actual means test. The test which produces the lowest payment is applied.

Under the personal income test, Youth Allowance for full-time students is reduced as income increases. However the first $7,223 of a merit and equity based scholarship is exempt. A job seeker can earn $143 per fortnight and a student or Australian apprentice $400 per fortnight without affecting the rate.  The rate of reduction after that changes frequently, contact Centrelink for specific rates.

Youth Allowance is not payable if the assets value (parental or partner plus personal) exceeds the amounts set out in section 547C. These limits increase twice a year.

Most students in receipt of Youth Allowance will also receive the Student Start-Up Scholarship, worth $1,300 per year. Some may be paid a fares allowance.

Austudy

Eligibility (ss7, 568)
To be eligible for Austudy, a person must satisfy an Activity Test, be over 25 (unless receiving Youth Allowance immediately before turning 25), and be an Australian resident. Waiting periods may apply, including a preclusion period for seasonal workers.

The Activity Test requires the person to be undertaking qualifying study (this may require a full-time, or in some circumstances, concessional study load) in an approved course, and satisfy progress rules. A person cannot satisfy the Activity Test if they are a new apprentice or have completed doctoral study.

A person commits an Austudy participation failure by failing without reasonable excuse to comply with certain Centrelink requirements, or to satisfy the Activity Test. If the person commits a failure in the same payment period as a previous failure, the failure is not considered a participation failure if it is the person’s first payment period. If the failure is committed during a subsequent period, it is not considered a participation failure if another failure was not committed in the immediately preceding payment period, or the person had acted in accordance with a Centrelink requirement in respect of the failure.

Following an Austudy participation failure, or failure to comply with a requirement in respect of the failure, Austudy is not payable until the person undertakes an activity required by, or complies with a direction of, Centrelink in respect of the failure. An eight-week non-payment period applies following repeated participation failures, although Centrelink have discretion not to apply the non-payment period.

Austudy is also not payable while the person is subject to a “multiple entitlement exclusion”. This applies if the person becomes entitled to another payment or scheme referred to in section 578A while receiving Austudy, or is subject to an Assurance of Support. Austudy is also not payable to CDEP Scheme participants or armed service widow(er)s who receive a lump sum or weekly payments under section 234(1)(b) of the Military Rehabilitation and Compensation Act 2004 (Cth).

Rate of Allowance (ss581, 1067L)

The rate of Austudy varies according to whether the recipient:

• is single;
• is a member of a couple; or
• has dependent children.

In addition, a special rate is available for long-term income support recipients commencing full-time study or an Australian Apprenticeship.