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1 in 6 Students Would be Better off with no Allowance

One in Six Students Getting Allowances Would Be Better Off If They Didn’t.

Press Release: New Zealand Union of Students’ Associations
10 September 2014

Research conducted by the New Zealand Union of Students’ Associations (NZUSA) shows that one in six students currently receiving a student allowance would be better off turning it down and applying as a low-income New Zealander for an accommodation supplement instead.

Student leader Daniel Haines describes this situation as “perverse”, and says it is outrageous that students are worse off than many other low-income New Zealanders. The situation we have revealed shows that many students are given inadequate information about the support which is currently available. As many as 10,000 students may be affected.

“Up until the age of 24, students’ allowances are means-tested against their parents’ income, itself a truly unfair component of the student loan scheme. Only one in three fulltime students get an allowance and many of these receive an abated amount of less than the maximum of $211.84 per week,” said Haines, NZUSA President.

“If a student is denied a student allowance on the grounds their parents earn too much money, they are unable to apply for an accommodation supplement. However, many students do not receive an allowance for a reason other than their parent’s income. This includes those whose type of course is excluded (eg. postgraduate students), people who failed in the previous two years, those whose own earnings are too high, and students who are part-time. It also includes those who are entitled but who choose not to get a student allowance. All students in these circumstances are able to apply for an accommodation supplement through Work and Income.”

“It is a ridiculous, quite outrageously so really, system where students are better off rejecting the support that is targeted to support them, in favour of support that is designed for other people. However, this is the real situation many students find themselves in and they have a right to be informed about the support available to them.”

“If you live in Auckland, are low income, and pay the average student rent of $220 per week, then you are entitled to $118 per week in accommodation supplement. Our recent survey of students’ income and expenditure showed that almost a quarter of Auckland students currently getting an allowance receive less than $118 due to the abatement regime.”

“If you live in Wellington and pay the average student rent of $178 per week, then you are entitled to $89 per week in accommodation supplement. Our recent survey of students’ income and expenditure showed that one in six Wellington students currently getting an allowance receives less than $89.”

“If you live in Hamilton or Christchurch and pay the average student rent of $150 per week, then you are entitled to $65 per week in accommodation supplement. Our recent survey of students’ income and expenditure showed that one in seven students in these regions who is currently getting an allowance receives less than $65.”

“Students aren’t told that they are entitled to the accommodation supplement and the “calculator” on the Work and Income website tells them that they cannot get one, even though many can. StudyLink does not tell someone with an abated allowance that they would be better off rejecting the insignificant amount in favour of a more substantial accommodation supplement and we are aware of only one tertiary institution that does.”

“When one in six students live in significant financial distress the fact that thousands do not get what they are entitled to is outrageous and a colossal failure on behalf of the agencies involved.”

“But the situation is also caused by the fact that the accommodation element of a student allowance has not changed in ten years whilst rents have doubled.”

“It’s time to give all low income students with high rent costs access to the accommodation supplement – giving it to those who are already entitled would make a good start”, says Haines.

RegionAverage student rentAccommodation Supplement Entitlement% of students receiving an allowance of less than

this

Auckland$220$11823.1%
Wellington$178$8916.2%
Hamilton$150$6514.3%
Christchurch$170$6514.3%

ENDS


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