Tertiary policy ‘ripe for rort’

Free tertiary study and a new increase to the student allowance could create a ‘‘perverse incentive’’ for people to enrol with no intention of studying, warns National.

That was because with a recently-announced $50 per week increase to the student allowance, the allowance was no longer pegged to the jobseeker benefit outstripping it by 23 per cent.

But the Government says it’s carried out the work and is confident that any risk of that occurring would ‘‘be at the margins’’ and weeded out quickly, with consequences for anyone who tried it.

From January 1, 2018, student allowance base rates and the maximum amount students can borrow for living costs will rise by a net $50 a week.

Where the allowance rate reflected the living costs of two adults, the increase would be $100 net a week. The Accommodation Benefit was also scheduled to rise by $20 a week in 2018.

The moves were part of the Government’s 100-Day Plan.

National tertiary education spokesman Paul Goldsmith said the increase, combined with free tertiary study, could leave the door open for the policy to be exploited by some who would see easy cash.

‘‘While all Kiwis would like to see unemployed New Zealanders engaging in genuine study, decoupling student allowances from benefit levels opens the system to abuse.’’

The student allowance entitlement for a single person 24 years and over without children was $212.45 per week, matching the jobseeker support entitlement for single people 25 years and over without children.

The $50 increase to the allowance, however, meant a person in this category would soon receive $262.45 – 23.5 per cent more than if they remained on the jobseeker benefit.

‘‘Student allowances have previously been pegged to the jobseeker benefit so there wouldn’t be any perverse incentives for people to enrol in tertiary study even if they had no intention of studying,’’ said Goldsmith.

‘‘But now that’s all changed, and the zero-fees policy will make it worse. It’s like having a new super jobseeker benefit with no strings attached.’’

The Government had to explain the measures it would take to prevent that from happening.

Education Minister Chris Hipkins said it was an issue the Government had been careful to do its homework on.

‘‘We looked at all of the different mitigations in place to ensure that people don’t switch and we’re pretty confident we’ve got enough safeguards in place that any kind of behaviour like that would be at the absolute margins.

‘‘And it would frankly be a very foolish person who did that, because they would lose any eligibility for future support if they did that, and those were under the rules introduced by the National Government actually.’’

Hipkins said they were ‘‘reasonably sensible’’ rules, ensuring students passed enough of their courses to retain their study benefits. A pass rate of 50 per cent was required.

‘‘So if someone sets out to basically rort the system, they’ll be clamped down on pretty quick and then they’ll lose their ability to access the system any further.’’

Another rule that applied - also introduced by the National Government - was that tertiary providers could lose funding for ‘‘non-completions’’.