Seanad debates

Thursday, 11 October 2012

Adjournment Matters

Third Level Grants

1:45 pm

Photo of Brian Ó DomhnaillBrian Ó Domhnaill (Fianna Fail)
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The issue I wish to raise is that of third level grants and the decision of the Minister for Education and Skills in the context of budget 2012 to reassess the evaluation process for such grants in order that, in addition to income, the value of certain capital assets will be taken into account. This is a cause of huge concern to self-employed persons, self-employed families and, in particular, farming families. I understand the capital asset test implementation group has completed its report and submitted it to the Minister. We are not sure what recommendations it contains, but it is important that the report be published as quickly as possible in order that everyone will have an understanding of what is happening.

There is a myth abroad that all students whose families have farms receive third level maintenance grants, but nothing could be further from the truth. A Higher Education Authority, HEA, survey completed of 72% of first year students during the 2009-10 academic year showed that only 8.9% of new students were from farming backgrounds. Of these 8.9% of students, only 39.7% were in receipt of third level grants. This means that between 4% and 5% of all first year college students from farming backgrounds receive grants. If the Minister for Education and Skills, Deputy RuairĂ­ Quinn, presses ahead with his proposals, he will deter young people living on farms or in rural areas or those whose parents are self-employed - for example, shopkeepers and others with small businesses - from proceeding to third level. These individuals will not be able to afford to go to third level if they cannot avail of the grants available.

Let us consider the position of a farmer who is generating income from the land he or she owns. Under the Minister's proposals, that income will have to be declared when the farmer's son or daughter is completing the application form for the third level maintenance grant. That income will, therefore, be assessed and will go towards determining whether a grant will be approved. What the Minister is endeavouring to do is extremely unfair. While the income to which I refer will be assessed, the Minister has also indicated that the value of capital assets will be taken into account. These assets are necessary in order to generate income. As a result, those to whom I refer will be assessed in respect of both their incomes and capital assets. If the Minister proceeds with his proposals, farmers and the self-employed will be assessed twice on the same earnings. That is extremely unfair. A person who runs a shop or some other business requires his or her premises in order to generate his or her income and create employment. The income from the shop or business is assessed as his or her means. It would be very unfair to discriminate against self-employed persons and farmers who are already struggling and who, on foot of the class of PRSI contributions they make, do not receive social welfare payments.

I ask that the report of the capital asset test implementation group be published. I accept that the Minister of State, Deputy Kathleen Lynch, does not hold a portfolio within the Department of Education and Skills. However, I must emphasise to her that it is critically important that the Minister, Deputy RuairĂ­ Quinn, refrain from implementing his proposals to bring capital assets into the equation in the assessment of means. It will be grossly unfair if what is envisaged comes to pass.

Photo of Kathleen LynchKathleen Lynch (Cork North Central, Labour)
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The Senator has indicated that the report of the capital asset test implementation group is under consideration. As yet, however, there are no proposals in respect of this matter.

Photo of Brian Ó DomhnaillBrian Ó Domhnaill (Fianna Fail)
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The Minister made an announcement on this matter in the context of budget 2012. I have in my possession a letter from him which confirms this.

Photo of Paddy BurkePaddy Burke (Fine Gael)
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The Minister of State to continue, without interruption.

Photo of Kathleen LynchKathleen Lynch (Cork North Central, Labour)
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It is unfair for the Senator to continually refer to the Minister pressing ahead with certain proposals, particularly as he is aware that a decision has not been made on the capital asset test implementation group's report. I thank the Senator for raising this issue, to which I am replying on behalf of my colleague, the Minister for Education and Skills, Deputy RuairĂ­ Quinn.

Last December, it was announced that the means test for student grants will be amended to take account of the value of certain capital assets in addition to income for new applicants from the 2013-14 academic year. The Senator will appreciate that, in the context of the current financial climate, the importance of accurately directing increasingly scarce resources towards those who need them most has become a high priority.

Many 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 introduction of such a test would create a more equitable basis for means testing, where a more complete analysis of a family's capacity to support their children in pursuing further or higher education is undertaken.

While the introduction of a capital assets test for student grants may have traditionally been perceived as likely to have an impact on certain communities, particularly the farming community, this is not the object of the proposal. The proposal is not designed to target any one group. 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, be they unemployed, employed, self-employed or retired.

Following agreement in principle by the Government to broaden the current means testing arrangements for student grants by way of inclusion of the value of capital assets, the Minister set up a dedicated implementation group to bring forward detailed proposals for implementation in 2013. The group was charged with bringing forward detailed implementation proposals on new means-testing arrangements for student grants, to include the value of assets, for new applicants from the 2013-14 academic year. The group was also charged with drafting a detailed outline of the scheme and providing the required information to enable the development of necessary related legislative provisions. The Minister has received the draft report of the implementation group and is currently reviewing it with officials before bringing it to the Government, which will make any final decisions.

1:55 pm

Photo of Brian Ó DomhnaillBrian Ó Domhnaill (Fianna Fail)
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It is very clear from the response that the Government has taken an initial decision. In making reference to the setting up of the group, the Minister of State's response uses the phrase, "Following agreement in principle". The group would not have been set up had the Government not been of the opinion that it wanted to target capital assets. The capital assets will inevitably include farmland and those of the self-employed.

The Minister of State said, "The group was charged with bringing forward detailed implementation proposals on new means-testing arrangements for student grants". It is very clear that the Government's agenda is to target land that is used by people to generate income. This is very unfair. We must await the outcome of the decisions. I urge the Minister of State to plead with the Minister, Deputy Quinn, not to implement this proposal. Now, when students are struggling to enter third level education due to the economic crisis, is not the time to be examining such a proposal. It will further deter students from entering third level education. This is very unfair in the current climate because there are very few jobs for those who have just completed the leaving certificate examinations. To further deter them from progressing into third level through the introduction of the proposed arrangement would be grossly unfair. I have no problem with the application of the arrangement to very wealthy people or millionaires but, unfortunately, it is to apply not only to the super-rich but to everyone, even those who are struggling to send children to college.

Photo of Kathleen LynchKathleen Lynch (Cork North Central, Labour)
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I very much acknowledge what the Senator is saying and assure him that the Minister for Education and Skills will be informed of his contribution. If this is a question of targeting everyone rather than groups, as proposed, we must acknowledge there are clearly people who can afford to send their children to third level, and there are others who clearly cannot. We must ensure the scarce resources we have are targeted at those who are least able to afford to send their children to third level.

The Seanad adjourned at 2.25 p.m. until 2.30 p.m. on Tuesday, 16 October 2012.