Leading up to the 2019 festive season, numerous Bills passed through the parliamentary process and became Acts (legislation); these legislative changes affect a wide range of personal finance areas.

Notably, regardless of whether you are a wealth accumulator or retiree, you may find that one or more of these legislative changes are of relevance to your financial situation, goals and objectives, now and into the future.

In this article, part two of a two-part series, we cover legislative changes that fall under the Government’s Social Services, Agriculture and Education portfolios:

• Education portfolio
  • The Higher Education Loan Program loan limits and debt repayments.
• Agriculture portfolio
  • The Farm Household Allowance and the financial hardship provisions.
• Social Services portfolio
  • The Paid Parental Leave Scheme and the dangerous jobs provision, and
  • Overseas welfare recipients and proof of life certificates.

Higher Education Loan Program (HELP) loan limit

Aviation courses

The renewable* HELP loan limit is currently set at $106,319 for most students. 

However, for those students that are enrolled in courses of study in medicine, dentistry, or veterinary science courses, a higher HELP loan limit of $152,700 applies. Importantly, from 1 January 2020, students enrolled in eligible aviation courses now also have access to the higher HELP loan limit.

Please note: The higher HELP loan limit also applies to students that:

• were enrolled in an eligible course of study in aviation prior to 1 January 2020; and 
• continue to be enrolled in an eligible course of study in aviation from 1 January 2020.

*Any repayments made on the HELP debt will credit the available HELP balance, up to the applicable HELP loan limit.

Education Legislation Amendment (2019 Measures No. 1) Bill 2019. Royal assent on 28th November 2019.

Higher Education Loan Program (HELP) debt repayment

Teacher education courses

One of the key challenges faced by schools and early childhood education providers in very remote locations in Australia is the attraction and retention of teachers.

Given this, from 1 January 2019 (applied retrospectively), teachers who have completed an eligible course of study in education, and incurred a HELP debt in relation to that course, are able to apply for:

• a reduction in the indexation of their outstanding accumulated HELP debt while they are teaching in a school classified as being in a very remote location of Australia; and 
• a remittance of all or part of their HELP debt incurred for their initial teacher education course after they have worked an equivalent of four years’ full-time work teaching in a school classified as being in a very remote location of Australia.

Please note: A school refers to an early childhood education and care service that includes a preschool education program, a preschool, or a school providing primary or secondary education.

Education Legislation Amendment (2019 Measures No. 1) Bill 2019. Royal assent on 28th November 2019.

Farm household allowance (FHA)

Expansion of financial hardship provisions

The FHA program includes a time-limited income support payment that assists eligible farmers and their partners who are experiencing financial hardship. However, it’s important to note that they can be affected by multiple financial hardships over the course of their lifetime.

Given this, the abovementioned time limit for FHA recipients has increased from 4 years over their lifetime to 4 years in each specified 10-year period; the next specified 10-year period commences from 1 July 2024.

In addition, for those FHA recipients who have exhausted their 4-year maximum period before 1 July 2020, a one-off lump sum ‘relief payment’ can be payable: 

• $7,500 for a single recipient, or 
• $6,500 for a recipient who is a member of a couple ($13,000 for a couple combined).

Lastly, the income offset provisions relating to FHA recipients and the income test have been broadened. 

Namely, up to $100,000 of farm business* losses can be offset against their ordinary income. Previously the offset was limited to $80,000 per financial year. Although ordinary income can’t be reduced below zero.

*A business that is a farm enterprise, and businesses that are directly related to the farm enterprise, such as agistment activities.

Farm Household Support Amendment (Relief Measures) Bill (No. 1) 2019. Royal assent on 28th November 2019.

Paid Parental Leave Scheme

Dangerous jobs provision

Under the Paid Parental Leave Scheme, eligible working parents can get tax-payer funded pay when they take time off from work to care for a newborn or recently adopted child. For example:

• Parental Leave Pay – up to 18 weeks of leave paid at the national minimum wage.
• Dad and Partner Pay – 2 weeks of leave paid at the national minimum wage.

When considering Parental Leave Pay, there are specific eligibility requirements that need to be met, amongst them is a work test. Namely, a person must have worked a minimum amount of time in the past 13 months:

• 10 months of the 13 months prior to the birth or adoption of their child; and
• 330 hours in that 10-month period with no more than a 12-week gap* between 2 working days.

*If their child’s birth or adoption was prior to 1 January 2020, then this was an 8-week gap.

However, it’s important to note that women can be employed in fields, such as construction or mining, where it’s not safe for them to continue to work while pregnant, and no alternative safe job can be provided.

Given this, from 1 January 2020, the work test will be moved forward to the 13 months prior to a person stopping work due to workplace hazards posing a risk to their pregnancy.  

Paid Parental Leave Amendment (Work Test) Bill 2019. Royal assent on 28th October 2019.

Overseas welfare recipients

Proof of life certificates

According to recent data, approximately 96,000 people reside permanently overseas and receive an Australian social security payment, and the majority are recipients of the Age Pension. To a large extent, the Government relies on voluntary reporting by family members or friends of the death of a pension recipient overseas. 

However, recent data has also identified a disparity between the death rate of pensioners aged 80 years+ overseas and pensioners in Australia. This suggests voluntary reporting may not be occurring in some instances, or in a timely manner; consequently, payments are continuing where there is no longer a legal entitlement.

Given this, from 20 December 2019, a person can be sent a notice of their requirement to provide a proof of life certificate at least once every two years if:

• the person has reached 80 years of age;
• the person is receiving the Age Pension, Disability Support Pension, Widow B Pension, Wife Pension or Carer Payment; and
• the person was continuously absent from Australia throughout the previous 2 years.

Please note: Where a proof of life certificate isn’t provided by an overseas welfare recipient within 13 weeks of the date of notice, or they don’t enter Australia during this period, their payment can be suspended. And, following a further 13-week period, their payment can be cancelled. However, a suspended or cancelled payment determination can be reversed if it deemed appropriate to do so.

Social Services Legislation Amendment (Overseas Welfare Recipients Integrity Program) Bill 2019. Royal assent on 20th September 2019.

Other legislative changes

There have been other recent legislative changes that have occurred. However, we have already covered these in detail previously. If you would like further information on any of these, then a link to each is provided below:

• The Protecting Your Super Package
• Employees with multiple employers
• The First Home Loan Deposit Scheme
• The Low and Middle Income Tax Offset
• The Putting Members’ Interests First Package

Moving forward

If you would like to discuss any of the abovementioned legislative changes, and their relevance to your financial situation, goals and objectives, please do not hesitate to contact us.

Click here for part one of this two-part series where we cover numerous other recent legislative changes.