Charlie McConalogue (Donegal North East, Fianna Fail)
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I thank the Minister of State, Deputy O'Dowd, for coming to the Chamber, but similar to the previous speaker I am disheartened by the trend in recent times whereby the Cabinet Ministers directly responsible are not responding to the Topical Issue debate in the manner promised when the Dáil term started. The Government was elected on a platform of introducing great reform to the way the Oireachtas would operate and also on a promise that it would engage with the Dáil in a way that had not happened previously. Unfortunately, the turnout in recent times of senior Ministers to respond to Topical Issue debates directly relevant to them is indicative that on too many occasions they are treating this Chamber as an irritation to them proceeding with what they want to do, regardless of what is said in this Chamber.

I wish to raise the Government’s proposal to introduce a capital means test for making decisions on maintenance grants for students attending third level colleges and the likely impact it will have on farming families as well as the self-employed. The Minister for Education and Skills, Deputy Quinn, announced his intention in that regard in the 2012 budget. In recent weeks there has been further media speculation as to exactly what he plans to put in place. At the beginning of 2012 he set up a review group to assess how such a system could be introduced and he promised that a report would issue by September. It is now February 2012 yet nothing firm has been announced on the issue except what we have read in the newspapers. The Minister’s approach to the issue displays a severe lack of knowledge and understanding of exactly what it means to be a farmer today or the challenges facing many in the self-employed and business community.

The year 2011 was very successful for farm income in comparison to previous years. The average farm income was €24,000. Much diversity is evident in farm income depending on the type of farming involved. For example, in dairying, which tends to be practised on larger farms, the average income in 2011 was €69,000. However, on beef farms the average income was €11,000 and it was €17,000 on sheep farms. That is taking into account all 100,000 farming households nationally.

The Minister’s proposal appears to be based on farm values of more than €750,000. If one takes an average acreage price of approximately €10,000, that would equate to a 75 acre farm. The Minister is talking about putting a notional value on the land which would then be added to the real income earned by a family in a given year. As a result, in many cases students from farming backgrounds would find themselves unable to access a student maintenance grant and unable to finance themselves through college.

If the Minister feels there is unfairness in the current student grant system he must examine how income is assessed and whether issues arise in that regard. People from the self-employed and farming communities would not have a problem with the system giving a fair reflection of incomes. Nobody could take issue with such an approach. However, it would be unacceptable for the Minister to place a notional value on assets which are a tool to derive an income. If the Minister proceeds with such a wrong-headed approach he will leave many families in a position where they cannot attend college. That will not be tolerated. The Minister must reverse from his current position. I am interested to hear what the Minister of State, Deputy O’Dowd, has to say on behalf of the Minister about his plans.

Fergus O'Dowd (Louth, Fine Gael)
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I am very sorry that I am not the Minister for Education and Skills, but if I were, I would be very happy to be present. The Minister, Deputy Quinn, is unavoidably absent this afternoon. I would not infer that his absence is not without good cause. I am happy to respond to the issue raised on behalf of the Minister.

The Deputy is referring to an announcement in budget 2012 that the means test for student grants will be broadened to take account of the value of certain capital assets as well as income. It is important to understand that the intention behind this approach is to ensure that, at a time of reduced resources, the Government targets valuable schemes, such as the student grant scheme, at those who need them most. The Deputy will know that a considerable body of reports over a number of years have strongly recommended the introduction of a capital test for student grants, particularly on the grounds of equity and fairness.

The Deputy will also be aware that the Minister for Education and Skills set up an interdepartmental working group to examine this issue and that he is due to bring proposals to Cabinet shortly. As the matter is due before Cabinet in the coming weeks, I am not in a position to provide specific details at this time, but any decision taken will be a collective Government decision. I can say emphatically, however, that broadening the means testing arrangements for student grants is not aimed at any particular section of the community - such as farmers - but rather at ensuring that all students are treated equally in the assessment of their or their family's means so that those in need of a grant can get one. I can, therefore, give the Deputy the assurance that he is seeking, namely, that farming families will not be unfairly targeted in any new arrangements. On the contrary, farmers, like all other citizens - be they unemployed, employed, self-employed or retired - whose income and assets fall below a certain level, will continue to be eligible for third level grants for their children.

Last year, the Government spent approximately €336 million supporting 76,600 students through the student grant scheme. That represents 38% of the total number of full-time students in higher education institutions and on post-leaving certificate programmes. That is a considerable amount of taxpayers' money, and no one would argue against the need to ensure that it is being spent carefully and targeted at those who need it most.

It is also interesting to note that the student grant system, where no account is taken of the capital value of savings or assets, is in contrast to other major schemes of income maintenance operated by the Department of Social Protection or supports provided by the HSE for example. The effect of this is that if a person has income below the current thresholds, which is €39,875 in 2013 to 2014 for a full grant and maintenance, but has considerable savings in the bank or a wide property portfolio, his or her child can still qualify for a grant.

Charlie McConalogue (Donegal North East, Fianna Fail)
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The key issue in the response is that from next year the assessment on whether a person is entitled to a maintenance grant will be done on the basis of his or her income and assets. The next assertion is that the change will not affect the farming community in particular. Unfortunately, the reality is that it will. If assets and farm land are taken into account, farming households of modest incomes will find themselves unable to qualify for a student grant. The Government is putting such families in a position where they must decide whether to sell some of their land in order to fund their children through college because a student maintenance grant will not be available to them in spite of having a low income. The way we should approach the issue is simple; we must ensure there is a fair way of assessing everyone's income. The system should be based on one's real income, not on an asset which is being used to generate income.

The Minister of State needs to revisit this issue and work with the Minister, Deputy Quinn, to ensure there is an understanding of what happens on farms across the country on a daily basis and of the reality of the level of the average farm income, which applies to most farm incomes, and ensure that the farming community is treated as fairly as everyone else. If we take the approach the Minister, Deputy Quinn, is planning, the farming community will be unfairly targeted because they will be assessed not only on their income, but also on a notional value of their land which they use to derive an income. If the Minister wants to tax people's land, taxes are already in place in terms of inheritance tax and capital gains tax which come into play when land is sold. However, while land is being held by the farming household it is being used to derive an income and it is that income that should be used to decide whether a family has the means to send their child to college independently or whether their child will need a student grant to ensure he or she has the same access to third level education as anybody from any other income background.

I ask the Minister to State to talk to the Minister, Deputy Quinn, about this. I ask the Labour and the Fine Gael parties to rethink this approach because what they propose to do will unfairly target the farming community and many in the self-employed community and business community.

Fergus O'Dowd (Louth, Fine Gael)
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I assure the Deputy his comments will be brought to the attention of the Minister, Deputy Quinn. I repeat what the Minister said in his statement, namely, that there is absolutely no question of any particular group such as farmers being targeted in terms of this issue. Clearly, the objective of the Government is to make sure that those who need to get student grants get them. Some 76,600 students in this country got grants last year, which cost €336 million and represented 38% of the total number of full-time students. There is a very good system in place whereby people on low incomes qualify.

It remains the Minister's firm commitment that there should be no financial barrier to third level students who would not otherwise be able to afford to attend college or university. It is not therefore the object of means testing proposals to exclude any particular sector of society. The test will be applied fairly to all applications and in common with other State means tested schemes. The two principal factors that facilitate spending, income and accumulated wealth or capital, would be taken into account for all applicants regardless of their employment status. This means that farmers or any other category of person whose income and assets fall below a certain amount and cannot afford to send their children to third level would still continue to receive State support while those who can afford to pay would have to do so.