Tuesday, 24 October 2006
Higher Education Grants.
Question 92: To ask the Minister for Education and Science the reason SSIA savings are taken into account in determining eligibility for the third level grant; if she has discussed this matter with the Department of Finance; if the relevant regulations will be changed in order to ensure that SSIA savings are not considered as part of the means test for third level grant eligibility; and if she will make a statement on the matter. [34441/06]
I assure the Deputy that the Government is determined to ensure that SSIA savers are treated fairly in the calculation of reckonable income under my Department's maintenance grant schemes. This is being achieved in two ways. First, income from SSIAs is being treated exactly the same as income from similar savings and investment products. Second, the reckonable income limits for student grants have been increased considerably in recent years.
Since SSIAs were introduced, the amount of income to be included in respect of them is the Government grant earned on the savings in the relevant tax year plus, 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 sustained in the relevant tax year 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, etc. The treatment of SSIAs is therefore consistent with the traditional treatment of other similar investments over many years. The Department of Finance is aware of this approach to the assessment of income for eligibility for student support.
In applying for a grant for the 2006-07 academic year, only the relevant income earned, as outlined above, on the SSIA in 2005 must be declared. The maximum Government grant to any SSIA saver last year, as in any year of the SSIA scheme, was €762. As I have pointed out in response to previous queries and parliamentary questions, this has been the position since SSIAs were introduced.
The Deputy will be pleased to know that income limits which apply when a person's eligibility for a grant is being assessed have increased significantly since SSIAs were introduced. The 2003-04 academic year was the first year in which the full year SSIA income had to be included in applying for a grant, as the reference tax year for the purpose of grant assessment was 2002. For 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 almost48%. 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, an increase of almost 73% on the amount allowed in the 2002-03 academic year.
As these increases show, this Government has shown a clear determination to improve the grant system to ensure that students get as much support as possible. Not only have we increased the income limits significantly, we have also made other improvements to the grants system. We have introduced two new income thresholds to allow for 25% and 75% grants as well as the 50% and 100% rates. We have brought in a new top-up grant to target extra funding at those who need it most and we have increased grant payment rates. The maximum level of the ordinary maintenance grant available this year is €3,110, compared to €2,390 in 2002. The maximum level of the top-up grant in 2006-07 is €5,970, compared to €3,000 in 2001-02.
Additional information not given on the floor of the House.
This year, more than €228 million has been allocated for the third level student support schemes. As the Deputy will be aware, further improvements to the grant system are on the cards, with the development of the Student Support Bill and the introduction of payment deadlines to ensure students get their grants earlier.
Not only has the Government ensured that SSIA savers are treated fairly in the assessment of income for maintenance grant purposes, but we have made major improvements to the grant system overall. This is in line with our proven commitment to increase access to third level education and ensure the maximum level of support for those who need it most.
Is the Minister aware that the Minister for Social and Family Affairs has been able to make changes for income from SSIAs? When the SSIA scheme was promoted by the Government, did it include in the terms and conditions the fact the reckonable income from it would be used when applying for a maintenance grant? If not, it is a matter for the Advertising Standards Authority. The terms and conditions should have made people aware of this.
I accept increases have been made in the maintenance grants but there have been greater increases in the costs of accommodation, travel and books. Does the Minister have a figure for the number of low income families who took out an SSIA expressly to fund college education for a child who have been affected by this decision? I have received complaints from several counties.
I reiterate that the savings people put away themselves are not taken into account, only the Government grant and the interest earned on it. Given the Government contribution for a year for a saver who put away €254 per month, the maximum, came to €785, and that the income limit was increased by substantially more, there are very few, if any, students who should be eliminated from the scheme solely on the basis of their savings in the SSIA. The scheme that is in operation this year is identical to the scheme that has been in place since the SSIA started. From the first time it was introduced, the income limits were increased by up to 48%. Anyone who qualified for a grant last year should not be disqualified this year on the basis solely of income from the Government grant or the interest on his or her SSIA. The income limit increased by much more.
The Department of Social and Family Affairs calculates income differently because it takes into account all of the capital, including all of the savings, and then allows a capital disregard. The effect is the same and it has not changed anything when it comes to the treatment of the SSIA vis-À-vis other savings and life assurance bonds.
There is a change. If a person is a few euro over €762, he will not get the grant. The Minister said possibly no one was affected but I have received complaints from people who are effected. Has the Minister asked the local authorities and the VECs how many students have been affected by this?
If a student got a grant last year and did not get it this year, it is not solely on the basis of his SSIA; it cannot be because the income limits are far greater than the increase he would get on the basis of the SSIA. Also, a student would not lose a grant, but could fall to 75% or 50% of that grant instead.