Tuesday, 24 October 2006
Higher Education Grants.
Question 97: To ask the Minister for Education and Science if she will abolish the inclusion of SSIA interest in assessing income for qualification of third level grants in accordance with the spirit of the scheme when it was first announced; and if she will make a statement on the matter. [34128/06]
Income from SSIAs is being treated exactly the same as income from similar savings and investment products for the purposes of assessing eligibility for a maintenance grant. This has been the case since SSIAs were introduced.
The amount of income to be included in SSIAs is the Government grant earned on the savings in the relevant tax year — in the case of savings accounts, the gross interest earned in the relevant tax year, and, in the case of investment accounts, the investment profit earned in the relevant tax year. Investment losses are deductible. The same position has long applied to interest earned on other savings products, including deposit accounts, post office savings certificates, life assurance bonds and so forth. The treatment of SSIAs is therefore consistent with the traditional treatment of other similar investments over many years. In applying for a grant for the 2006-07 academic year, only the relevant income earned, as outlined above, on the SSIA in 2005 had to be declared.
With regard to how much impact income from an SSIA could have in determining whether a person would qualify for a grant, the reckonable income limits for student grants have been increased considerably in recent years. In the 2003-04 academic year, the income limit for a family with four children was increased from €23,770 to €35,165, an increase of nearly 48%. However, the maximum amount a SSIA saver could have received by way of Government contribution to their SSIA in any one year is €762. Only the amount of the Government contribution, and any savings interest or investment profit earned in one year, is taken into account in assessments of eligibility for a maintenance grant. The income limits have continued to rise each year, to the point where the limit for a family with four children this year is €41,055.
We have also introduced two new income thresholds to allow for 25% and 75% grants as well as the 50% and 100% rates, as well as the new top-up grant to target extra funding at those who need it most. The maximum level of ordinary maintenance grant available this year is €3,110 compared to €2,390 in 2002. The maximum level of the top-up grant is €5,970 compared to €3,000 in 2001-02.
This year, over €228 million has been allocated for the third level student support schemes. Further improvements to the system are being developed at present to ensure that not only is it a well resourced one but that it is also customer friendly.
Additional information not given on the floor of the House.
To return to the issue of how SSIA income is treated for maintenance grant purposes, the Deputy can be assured that SSIA income is being treated the same as income from similar savings products and that the income limits have been increased substantially in recent years. The SSIAs are being treated the same way this year as they have each year since they were introduced.
I return to the points raised by Deputy Enright which were not fully addressed by the Minister. For example, the Deputy stated that the Minister for Social and Family Affairs is in a position to make allowances in respect of his Department. When this scheme was announced, people were informed about its importance and about the fact that they would receive additional money from the Government. They were never told that it would affect their grants. Is it not somewhat mean to deal with them in this way? Would the Minister not open her heart, ignore the income people earned from their SSIAs and go with the spirit of the scheme and ensure that higher education grants will not be affected? It is fine to say that people will not be affected because the limits have been increased this year. That is similar, however, to saying that if one obtains an increase in one's pension in the budget, local authorities should be allowed to claw it back in rents. This is about the spirit of the scheme and a degree of generosity.
The important point is that the limits increased in each year by far more than what any saver would have accrued via his or her SSIA and the interest attaching thereto. Last year, the limit was €33,890 for the 100% maintenance grant. This year, it is €35,485. If one is only receiving €785 plus some interest, the limit increase far outweighs what one would have received from one's SSIA.
For social welfare purposes, there are no special means testing provisions relating to SSIAs. The latter are treated in the same way as other savings and investments, such as money deposited in An Post savings accounts or shares. It would have been very unfair to penalise those saving with An Post or a credit union or putting money away each month under another system——
——and not take into account the money people earned from SSIAs. It is not the money saved that is being taken into account; it is only the grants and interest received. Income limits were increased generously over last year — they have been increased in every year, particularly the first, since the SSIA scheme was put in place — and students should not feel in any way penalised in respect of the money they have gained.
I understand what the Minister is saying but the point I am making is that when the scheme was introduced, the spirit of it appeared to be that one would gain the full benefit of the proportion of the money the Government was to provide. In my view, it is mean to claw it back in this way. The Minister is generally a generous woman.
Approximately 18 months ago, before the media began to take an interest in this matter, I highlighted the fact that, for example, lone parents' SSIA earnings were being calculated in advance of when their interest accrued and certainly prior to the end of the scheme. The levels relating to when they would qualify for grants were applied before these people actually received or could access their money. That was cruel and unjust. Does the Minister plan to reverse what happened in this regard?