The Number of Students on Youth Allowance Has Dropped Significantly

In a concerning trend, the number of students receiving Youth Allowance payments has decreased sharply over the past 20 years, leaving experts worried that low-income and regional students are being locked out of tertiary education.

Department of Social Services figures show that there were roughly 275,000 students receiving Youth Allowance in June 2005, compared to just under 162,000 in May this year. This sharp decline has led to concerns from experts that the low payment rate is deterring low-income and regional students from going to university or completing their studies.

Neeve Nagle, a law student at the University of Technology, Sydney, and a member of the National Union of Students, shared her personal experience with Youth Allowance. She moved from a small town in the Hunter Valley to attend university in Sydney, relying on Youth Allowance payments to support herself during her first couple of years of study.

"But when we lock out students that can't financially afford to live independently [due to the parental income test] the sector will begin to collapse, and these students will no longer attend," Ms. Nagle said. "Students are not able to afford to have full days off for uni because they're not on Youth Allowance and they need to go work their job instead, and so they're taking half days off work popping into class, running back."

The Decline of Youth Allowance Payments

There are two streams for Youth Allowance: student payments and job seeker payments. Both apply to people aged 24 and younger, and payment rates are determined by personal and parental income, unless the applicant can demonstrate independence.

Youth Allowance payment rates drop once combined parental income hits $65,189. This year's federal budget projected nearly $500 million less in expenditure on student payments over the forward estimates due to fewer people taking up Youth Allowance.

Experts Weigh In

Andrew Norton, an expert in higher education policy at Monash University, noted the "structural decline" in Youth Allowance in 2023. He thinks the strong labour market could be a key factor, with research showing that just over half of Youth Allowance recipients were working during semester in 2014, compared to over 70 per cent today.

Professor Norton said it must be "impossibly difficult" to do well academically if a person is forced to work and study full-time. National Union of Students president Ashlyn Horton agrees, saying that having to work long hours while studying impacted disadvantaged students the most and had led to a decline in campus culture.

The Concerns

Experts are concerned that low payment rates are deterring people from going to university or causing them to drop out before they graduate. The rate of Youth Allowance remains much lower than other forms of income support, with a young person aged 18 or older with no children living away from home to study receiving just under $332 a week.

Program director of social security at the Australian Council of Social Services (ACOSS), Charmaine Crowe, said that Youth Allowance payments should be lifted to at least $82 a day so that students can cover the costs of essentials like food, energy, housing, and focus on completing their course.

A Way Forward?

Raising the rate of payments like Youth Allowance has been the top priority of the Economic Inclusion Advisory Committee for three consecutive years. However, the government did not respond to a question from Hack about plans to raise the rate in its coming term.

Professor Norton noted a "modest increase" in the number of people taking up Youth Allowance in recent months, which could be due to a higher number of domestic student enrolments than at any other time except for the brief COVID spike. Could this trend continue, and will the government take action to address the concerns surrounding Youth Allowance payments?