Cut in Centrelink payments hurts students

Cut in Centrelink payments hurts students

Some students have begun misstating and omitting income details to Centrelink to avoid the poverty trap

[media-credit id=78 align=”alignleft” width=”590″]Couple Zac Reimers and Savannah Irwin currently don't receive government assistance.[/media-credit]

Couple Zac Reimers (left) and Savannah Irwin (right) currently don’t receive government assistance.

The Department of Education, Employment and Workplace Relations (DEEWR) has stated that from July 1, 2012, students will receive an increase in their Centrelink personal income threshold.

Currently set at $236 per fortnight, the personal income threshold is a ceiling which, once breached, causes a reduction in Centrelink’s Youth Allowance assistance.

Students in receipt of Centrelink currently have their government assistance reduced by 50 per cent if earning between $118.01 and $158 per week. A 60 per cent reduction in Centrelink income occurs when students earn more than $158 per week.

Some students, in an effort to evade what is sometimes referred to colloquially as the “poverty trap” of the personal income threshold, have begun purposefully misstating and omitting income details to Centrelink.

“Ever since I started my science degree, I’ve been taking jobs that pay under the counter. It’s almost impossible to afford it any other way,” said a source who wished to remain anonymous.

The legislation to increase the personal income threshold from $236 to $400 per fortnight was originally planned to roll out on January 1 2011, 18 months prior to its revised release date.

Introduced under the Keating Government in 1993, the personal income threshold was not indexed to account for the rising cost of living, and has remained the same for almost a decade.

But the announcement means little to those already disillusioned with the system. Zac Reimers of the Queesnland University of Technology said he has given up trying to secure Youth Allowance, despite meeting most of the eligibility criteria.

“I know it sounds cynical, but it really does seem as though they set up a ridiculous number of hurdles to prevent you getting anything,” Mr Reimers said.

“I was refused Centrelink benefits not on the basis of my own income, but on the basis of [my girlfriend’s] income.”

While the proposed increase in the personal income threshold won’t be of benefit to couples like Mr Reimers and Ms Irwin, most students have welcomed the change.


Listen to the interview with Mr Reimers below