By: Natalie Akoorie
Increases to fulltime student allowances will mean payments top what many can earn on the dole each week.
The Government is set to increase student allowances by $50, as well as increasing the amounts available under the student loan scheme.
Under the $200m package announced by education minister Chris Hipkins last week, a single student aged under 24 or under will receive $227 – compared with the current job seeker benefit of $175.
Those who are single and aged over 24 will receive $262 – compared to an existing job seeker benefit of $210.
National’s tertiary education spokesman Paul Goldsmith says the more generous student allowances will encourage people to go off a benefit and enrol for study, with no incentive to attend class.
But Hipkins dismissed the claim, saying safeguards were already in place to rule out people trying to take advantage of the extra money.
The gap between the payments could also be short-lived as the Government is likely to look at tax cuts for the unemployed, and other potential increases, by its first Budget in May next year.
Goldsmith told the Herald on Sunday he believed the 28 per cent increase in student allowances provided “perverse incentives” for disingenuous people to move from a job seekers benefit to becoming a student, particularly as the study would soon be free.
“There’s a very clear reason why the student allowance rates were in sync with the benefit rates and had been for a long time.
“We want to see unemployed New Zealanders engaging in genuine study but by uncoupling the allowances from the benefit levels it does definitely open the system to abuse.
“It’ll be like having a new super job seeker benefit with no strings attached.”
Goldsmith said when a person moved from the dole to education it was celebrated.
“But you have to be naive to think that there isn’t room for non-genuine decision-making in order to get that extra $50 a week,” he said.
“They haven’t given much thought to the detail of it and the potential unintended consequences.”
He said there should be eligibility contingencies to ensure the 130,000 students who qualify for student allowances and all those who apply for free tertiary education, attend, complete and pass their course.
“The cost is not just that extra resource which is going to have an impact in undermining the whole integrity of the benefit system, but also if you’re not genuinely interested in doing the courses then that’s a colossal waste of education resources.”
However Hipkins said there were already a series of safeguards in place to prevent such problems.
That included cutting eligibility for further student support if people are proven to be milking the system.
“So it would be a very short-term and very stupid thing for somebody to do because they then lose their eligibility for any future forms of student support including their ability to access loans and allowances in the future.”
Tertiary providers were also under obligation to deliver quality programmes to students and could face funding cuts if the system was undermined, Hipkins said.
“If students aren’t showing up to them and not completing them there’s actually financial incentives in place to stop providers allowing that.
“Providers aren’t going to want to enrol people if they are concerned that is the likely outcome because they are going to lose funding.”
Hipkins said if providers were not convinced they were enrolling a genuine student there were steps that could be taken to “ensure they don’t end up with people ripping off the system.”
“We’re going to monitor that very closely because we certainly don’t want people enrolling in programmes if they don’t intend to complete them.”
During the election campaign Labour said it would increase the amount of money an unemployed person could earn before tax rates kicked in, taking the threshold to $150 from $80 for a single person and $100 for a single parent.
It means the job seekers benefit overall will increase, an initiative Hipkins said was likely to be announced during the Government’s first Budget next year.
Source: NZ Herald