Budget 2014: What it means for younger Australians
The Treasurer has handed down a Budget with significant implications for younger Australians including the requirement that they be “earning, learning or participating.” Here’s what you should know.
- University fees are likely to rise under changes proposed, with the Government announcing that from 2016 universities will be allowed to set their own tuition fees. This will not affect students already studying.
- The Government will also be able to charge an interest rate on HELP (Higher Education Loan Program) loans that is reflective of the Government’s cost of borrowing. Currently there is no interest charged on HELP debts, although accumulated HELP debts more than 11 months old are indexed each year, to ensure the debt retains its real value by adjusting it in line with changes in the cost of living.
- Instead of inflation, the indexing rate will be replaced by the 10-year government bond rate, which is typically higher, capped at 6% per year.
- Students will have to begin repaying their HELP debt earlier, with the minimum income threshold for repayment lowered by 10% to an income of around $50,000.
- The Government will provide concessional Trade Support Loans of up to $20,000 over a four-year apprenticeship to put people completing a trade qualification on a more level standing with university students.
- The Government also announced that it will provide direct financial assistance for all students studying a diploma and sub-bachelor degree courses.
- Previously, once a young person turned 22 they would move from the lower Youth Allowance ($414 per fortnight) to Newstart ($510 per fortnight). This eligibility age for Newstart has been shifted upwards to 25.
- Unemployed Australians under the age of 30 will have to wait six months to be eligible for Newstart and will only be able to claim it for six months at a time.
- Australians under the age of 30 will need to participate for 25 hours per week in a Work for the Dole scheme to be eligible for income support.
Important information: This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.