Commonwealth of Australia Explanatory Memoranda

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HIGHER EDUCATION SUPPORT AMENDMENT (2022 MEASURES NO. 1) BILL 2022

                                   2022



        THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




                       HOUSE OF REPRESENTATIVES




HIGHER EDUCATION SUPPORT AMENDMENT (2022 MEASURES NO. 1) BILL 2022




                      EXPLANATORY MEMORANDUM




           (Circulated by authority of the Minister for Education,
                          the Hon Jason Clare MP)


2


TABLE OF CONTENTS OUTLINE .................................................................................................................................... 4 FINANCIAL IMPACT STATEMENT ................................................................................................. 5 CONSULTATION ......................................................................................................................... 7 STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS............................................................... 8 NOTES ON CLAUSES ................................................................................................................. 11 Schedule 1--Grandfathered students ....................................................................................... 12 Part 1 - Amendments ..................................................................................................................... 12 Part 2 - Application and transitional provisions ............................................................................. 12 Schedule 2--HELP debt arrangements for certain rural, remote or very remote health practitioners ............................................................................................................................ 19 Part 1 - Amendments ..................................................................................................................... 19 Part 2 - Applications, saving and transitional provisions ............................................................... 27 3


HIGHER EDUCATION SUPPORT AMENDMENT (2022 MEASURES NO. 1) BILL 2022 OUTLINE The purpose of the Higher Education Support Amendment (2022 Measures No. 1) Bill 2022 (the Bill) is to amend the Higher Education Support Act 2003 (HESA). The Bill will amend the definition of a 'grandfathered student' to include students undertaking an honours course that is related to a course of study they commenced with a higher education provider before 1 January 2021 but that they did not complete until after 1 January 2021. The proposed amendment to the definition of a 'grandfathered student' in HESA will clarify grandfathering arrangements under the Job-ready Graduates package of reforms to higher education. The Higher Education Support Amendment (Job-ready Graduates and Supporting Regional and Remote Students) Act 2020 amended HESA to change student and Commonwealth contribution amounts, to encourage students to enrol in courses in areas of job growth. Those amendments inserted a definition of 'grandfathered student' in Schedule 1 of HESA to treat certain existing students (on and after 1 January 2021) beneficially where the changes would otherwise result in those students being charged a higher student contribution amount. Under the current definition, Commonwealth supported students who completed a course at the bachelor level after 1 January 2021 do not fall within the definition of 'grandfathered student' when they commence a subsequent related honours course. The current definition of a 'grandfathered student' only applies where a student completed the bachelor level course prior to 1 January 2021. Where a student commences or transfers to a new related honours course after 1 January 2021, they are also not covered by the definition. The policy intention is that a student should be a 'grandfathered student' where they commenced a bachelor level course before 1 January 2021 and subsequently commence a related honours course, regardless of when the bachelor level course is completed. To benefit the greatest number of students, these amendments will apply to any student who meets the new definition and undertakes a unit of study in an ongoing course or an honours course with a census date on or after 1 January 2021, whether the person enrolled in that unit before, on or after the amendments commence. This means some students will retrospectively become grandfathered students, and any student contribution amounts deferred to the Higher Education Loan Program (HELP) or paid upfront may need to be re-credited or refunded, respectively. To ensure the seamless and beneficial transition of these amendments in relation to students affected retrospectively (defined as 'affected students'), the Bill also includes application and transitional provisions which set out the steps that a higher education provider must take in respect of an affected student for units that form part of the relevant honours course with a census date in the period from 1 January 2021 to the 4


commencement of the relevant provisions in the Bill (the 'transition period'). The actions the higher education provider must take will depend on whether the student has made a full up-front, partial up-front or no upfront payment of the student contribution amount as well as the amount of any up-front payments made, and include a re-credit of an affected student's HELP balance and/or a refund of an excess up-front payment amount to the student. Compliance with the application and transitional provisions is taken to be a condition of a grant made to a higher education provider under Part 2-2 of HESA. Further, the Bill enables the Minister to make transitional rules relating to the amendments, or repeals, made by the Bill, with certain limits imposed. This is also intended to be a beneficial measure for affected students. The Bill also makes a technical amendment to HESA to clarify that a student whose course of study is discontinued by their provider, and who is forced to transfer to a new course of study, will be treated as a grandfathered student. These students are already grandfathered under HESA; however, this amendment puts this beyond doubt and provides clarity and certainty for students and providers. The Bill will also introduce new provisions to HESA to partially or completely reduce outstanding HELP debts for eligible health practitioners working in rural, remote or very remote Australia. The measure also allows for the waiver of indexation in relation to eligible health practitioners' HELP debts while they are completing eligible work in a rural, remote, or very remote area. This measure is intended to encourage initial employment and retention of health practitioners to work in rural, remote or very remote areas of Australia, addressing issues of equity and access to healthcare in these areas. FINANCIAL IMPACT STATEMENT The financial implications of this Bill are expected to be moderate. The grandfathering amendments in Schedule 1 to the Bill will result in a negligible financial impact due to the resultant reduction of HELP debt in respect of eligible study undertaken by grandfathered and transitionally grandfathered students. Grandfathered students are charged lower student contribution amounts, thus reducing the amount of funding the Government pays to providers on students' behalf through the HELP program, and reducing the associated costs of administering the program. As the changes to grandfathering arrangements are not expected to affect large numbers of students, the financial impact on higher education providers and the Commonwealth is expected to be negligible. The grandfathering amendments will have no financial impact on Commonwealth Grant Scheme funding paid to higher education providers. Providers can only be paid a maximum basic grant amount (MBGA). As a COVID relief measure, eligible providers' MBGAs are guaranteed by the Higher Education Continuity Guarantee, for the grant years 2021 to 2023, under Part 8 of the Higher Education Support (Other Grants) Guidelines 2022. This 5


means eligible providers will receive their full MBGA, no more and no less, irrespective of their actual enrolments. The measure to reduce HELP debts for health practitioners is estimated to have an underlying cash impact of $27.2 million over the period 2021-22 to 2025-26. 6


CONSULTATION The department has not undertaken a formal consultation process relating to the proposed change to grandfathering arrangements. However, the measure reflects the original policy intention of grandfathering arrangements in HESA under the Job-ready Graduates Package, which the sector was consulted on. Feedback received from students and other stakeholders following the initial introduction of the Job-ready Graduates Package was also taken into consideration in the development of this measure. Following the announcement of the 2021-22 MYEFO HELP for Rural Doctors and Nurse Practitioners initiative, the Department of Health completed consultations with health sector stakeholders - through established consultation channels - to explain how the new program to reduce outstanding HELP debts would operate, and to seek their input to ensure the program would incentivise the targeted recipients. Stakeholder feedback identified issues in relation to the eligibility requirements for health practitioners delivering primary care services, including in relation to both the setting where services are delivered and the remuneration arrangements for nurse practitioners and medical practitioners working as, or working towards attaining fellowship as, a general practitioner or a rural generalist. These concerns have been addressed in the overall design of the program, whereby the Bill establishes the program, eligibility requirements for the target health practitioners and the nature of the work to be undertaken to achieve the benefits of the program and provides for secondary legislation - the HELP Debtor Guidelines (Health Practitioners) - to articulate the specifics of eligible participants, eligible locations, and eligible work, and other arrangements to support the administration of the program. 7


STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 HIGHER EDUCATION SUPPORT AMENDMENT (2022 MEASURES NO. 1) BILL 2022 The Higher Education Support Amendment (2022 Measures No. 1) Bill 2022 (the Bill) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. Overview of the Bill The purpose of the Bill is to amend the Higher Education Support Act 2003 (HESA). The Bill will amend the definition of a 'grandfathered student' to include students undertaking an honours course that is related to a course of study they commenced with a higher education provider before 1 January 2021 but that they did not complete until after 1 January 2021. The proposed amendment to the definition of a 'grandfathered student' in HESA will clarify grandfathering arrangements under the Job-ready Graduates package of reforms to higher education. The Higher Education Support Amendment (Job-ready Graduates and Supporting Regional and Remote Students) Act 2020 amended HESA to change student and Commonwealth contribution amounts, to encourage students to enrol in courses in areas of job growth. Those amendments inserted a definition of 'grandfathered student' in Schedule 1 of HESA to treat certain existing students (on and after 1 January 2021) beneficially where the changes would otherwise result in those students being charged a higher student contribution amount. Under the current definition, Commonwealth supported students who completed a course at the bachelor level after 1 January 2021 do not fall within the definition of 'grandfathered student' when they commence a subsequent related honours course. The current definition of a 'grandfathered student' only applies where a student completed the bachelor level course prior to 1 January 2021. Where a student commences or transfers to a new related honours course after 1 January 2021, they are also not covered by the definition. The policy intention is that a student should be a 'grandfathered student' where they commenced a bachelor level course before 1 January 2021 and subsequently commence a related honours course, regardless of when the bachelor level course is completed. To benefit the greatest number of students, these amendments will apply to any student who meets the new definition and undertakes a unit of study in an ongoing course or an honours course with a census date on or after 1 January 2021, whether the person enrolled in that unit before, on or after the amendments commence. This means some students will retrospectively become grandfathered students, and any student 8


contribution amounts deferred to the Higher Education Loan Program (HELP) or paid upfront may need to be re-credited or refunded, respectively. To ensure the seamless and beneficial transition of these amendments in relation to students affected retrospectively (defined as 'affected students'), the Bill also includes application and transitional provisions which set out the steps that a higher education provider must take in respect of an affected student for units that form part of the relevant honours course with a census date in the period from 1 January 2021 to the commencement of the relevant provisions in the Bill (the 'transition period'). The actions the higher education provider must take will depend on whether the student has made a full up-front, partial up-front or no upfront payment of the student contribution amount as well as the amount of any up-front payments made, and include a re-credit of an affected student's HELP balance and/or a refund of an excess up-front payment amount to the student. Compliance with the application and transitional provisions is taken to be a condition of a grant made to a higher education provider under Part 2-2 of HESA. Further, the Bill enables the Minister to make transitional rules relating to the amendments, or repeals, made by the Bill, with certain limits imposed. This is also intended to be a beneficial measure for affected students. The Bill also makes a technical amendment to HESA to clarify that a student whose course of study is discontinued by their provider, and who is forced to transfer to a new course of study, will be treated as a grandfathered student. These students are already grandfathered under HESA; however, this amendment puts this beyond doubt and provides clarity and certainty for students and providers. The Bill will also introduce new provisions to HESA to partially or completely reduce outstanding HELP debts for eligible health practitioners working in rural, remote or very remote Australia. The measure also allows for the waiver of indexation in relation to eligible health practitioners' HELP debts while they are completing eligible work in a rural, remote, or very remote area. This measure is intended to encourage initial employment and retention of health practitioners to work in rural, remote or very remote areas of Australia, addressing issues of equity and access to healthcare in these areas. Analysis of human rights implications The Bill engages: • the right to education - Article 13 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) • the right to health - Article 12 of the ICESCR. Article 13: Right to education The Bill engages the right to education, which is set out in Article 13 of the ICESCR. Article 13 recognises the important personal, societal, economic and intellectual benefits of education. Article 13 provides that secondary education in all its different forms, including 9


higher education, shall be made generally available and accessible to all by every appropriate means. The proposed amendment to the definition of a 'grandfathered student' will capture more students than the previous definition, as it will include students who undertake an honours course that is related to a course of study they commenced before 1 January 2021. This will mean that an increased number of students will pay a reduced student contribution amount for a place in a unit of study. This will reduce the financial burden on those students and improve their access to education. The proposed amendments relating to the reduction of outstanding HELP debts for eligible health practitioners working in rural, remote or very remote Australia promotes the right to education by providing a post-study economic benefit of reducing all or part of a health practitioner's HELP debt. This promotes the right to education as it reduces the financial burden on health practitioners for debts incurred in the course of pursuing higher education. Article 12: Right to Health The Bill also engages the right to health, which is set out in Article 12 of the ICESCR. Article 12 recognises the right of all persons to the enjoyment of the highest attainable standard of physical and mental health. The proposed amendments relating to the reduction of outstanding HELP debts for eligible health practitioners working in rural, remote or very remote Australia provide a financial incentive for health practitioners to consider working in rural, remote and very remote areas. These areas have historically experienced shortages of these key health workers which has been a contributing factor towards the measurably lower health outcomes in these regions compared to the Australian average. Increasing the number of health practitioners in these areas will help address the inequity in access to health services and thereby improve health outcomes for Australians living in rural, remote and very remote areas. Conclusion The Bill is compatible with human rights as it supports the rights to education and health. Minister for Education, the Hon Jason Clare MP 10


HIGHER EDUCATION SUPPORT AMENDMENT (2022 MEASURES NO. 2) BILL 2022 NOTES ON CLAUSES Clause 1 - Short title 1. This clause provides that the short title of the Bill, once enacted, is the Higher Education Support Amendment (2022 Measures No. 1) Act 2022. Clause 2 - Commencement 2. This clause states that the Bill, once enacted, commences on the day after it receives the Royal Assent. Clause 3 - Schedules 3. This clause provides that any legislation that is specified in a Schedule is amended or repealed as set out in the applicable items in the Schedule and that any other item in a Schedule has effect according to its terms. 11


Schedule 1--Grandfathered students Higher Education Support Act 2003 Part 1 - Amendments Items 1 and 2 - Subclause 1(1) of Schedule 1 4. Subclause 1(1) of Schedule 1 to HESA defines terms that are used in the Bill. One of the terms defined in subclause 1(1) of Schedule 1 is the term 'grandfathered student'. 5. Item 1 inserts new subparagraph (ia) into the definition of 'grandfathered student'. Subparagraph (ia) provides that, where a person who commenced a course of study (the ongoing course) with a higher education provider before 1 January 2021, completes that course and commences another course of study (an honours course that leads to an honours degree) that relates to the ongoing course, the person is covered by the definition of 'grandfathered student'. 6. Item 2 is a technical amendment to reflect that the term 'higher education award' is used earlier in the provision (the symbol '*' is not needed for the second use of the term to reflect drafting practice throughout the Act). Item 3 - After subclause 1(1C) of Schedule 1 7. Item 3 inserts a new subclause 1(1CA) into Schedule 1 of HESA. This new subclause provides that, without limiting subclause (1C), a course of study is taken to be restructured by a provider for the purposes of that subclause if the course of study is discontinued by the provider. Subclause (1C) provides that students in an ongoing course (within the meaning of paragraph (a) of the definition of grandfathered student in subclause (1)), or a replacement course in relation to such an ongoing course, will continue to be grandfathered students if their course is or was restructured by their provider on or after 1 January 2021. 8. This is a technical amendment to clarify that a student whose course of study is discontinued by their provider, and who is forced to transfer to a new course of study from 1 January 2021, will be treated as a grandfathered student. These students are already grandfathered under HESA as they are already considered to be in a 'restructured course'; however, this amendment puts this beyond doubt and provides clarity and certainty for students and providers. Part 2 - Application and transitional provisions Item 4 - Definitions 9. Item 4 defines terms used in Part 2 of Schedule 1 to the Bill. The defined terms are: 'affected student', 'old student contribution amount', 'relevant amendment' and 'transition period'. 12


10. 'Affected student' is defined as a person who is a grandfathered student because of new subparagraph (a)(ia) of the definition of 'grandfathered student' in Schedule 1 to HESA and has enrolled in a unit of study in a related honours course with a census date at any time during the transition period. 11. 'Old student contribution amount' is defined, in relation to a unit of study for an affected student, as the student contribution amount for the unit of study that applied to the student during the transition period. This is the student contribution amount that the affected student was charged when treated as a non-grandfathered student. 12. 'Relevant amendment' is defined as the amendment made by item 1 of Part 1 of Schedule 1 to the Bill (i.e. the amendments made to the definition of 'grandfathered student' in Schedule 1 to HESA). 13. 'Transition period' is defined as the period starting on 1 January 2021 and ending on the day before the commencement of item 4. This is the period during which the affected students will have been treated as non-grandfathered students in relation to units forming part of a related honours course. Item 5 - Application--definition of grandfathered student 14. Item 5 provides that the 'relevant amendment' applies on or after the commencement of item 5 in relation to a person who undertakes a unit of study in an ongoing course or an honours course that has a census date on or after 1 January 2021, whether the person enrolled in that unit of study before, on or after the commencement of that item. This provision clarifies that the amendment to the definition will apply to existing students and will mean that students who commenced an honours course after 1 January 2021 will be covered by the new definition where they commenced, but did not complete, the bachelor level course that relates to the honours course prior to 1 January 2021. Item 6 - Application--restructured courses 15. Item 6 provides that the amendment made by item 3 of Part 1 of Schedule 1 (relating to restructured courses of study) applies in relation to restructures that occur on or after 1 January 2021. This application provision aligns with the application of subclause 1(1C) to students in restructured courses on or after 1 January 2021. Item 7 - Full up-front payment made during transition period 16. Item 7 sets out the actions that a higher education provider must take where an affected student has made an upfront payment of the full student contribution amount for a unit with a census date during the transition period. The student contribution amount an affected student paid as a non-grandfathered student would be higher than the student contribution amount the student would have paid had they been treated as a grandfathered student during the transition period, necessitating a refund of the difference from the provider. 13


17. Where an affected student has made a full upfront payment in respect of a unit, the student will not have accessed a HELP loan and so it will not be necessary to re-credit the student's HELP balance. 18. Subitem 7(1) sets out the circumstances in which item 7 applies. It provides that item 7 applies if: • during the transition period, an affected student made one or more upfront payments to a higher education provider in relation to a unit of study; and • the amount of that payment, or the sum of those payments, is equal to 90% of the affected student's old student contribution amount for the unit; and • under section 96-3 of HESA, the Commonwealth paid an amount to the higher education provider for the unit in discharge of the affected student's liability to pay their old student contribution amount for the unit (i.e. the 10% paid in accordance with section 96-3 of HESA). 19. Subitem 7(2) provides that, if the amount paid by the Commonwealth is more than the amount that would have been paid to the higher education provider had the relevant amendment been in force during the transition period, the difference between the 2 amounts may be: • deducted from any amount that is payable, or to be paid, to the higher education provider under HESA; or • recovered by the Commonwealth from the higher education provider as a debt due to the Commonwealth. 20. As the student contribution amount for a grandfathered student is lower than the student contribution amount for a non-grandfathered student, the Commonwealth will have paid more to the provider under section 96-3 of HESA (i.e. 10% of the relevant student contribution amount) during the transition period than it would have had the relevant amendment been in force during the transition provision, making a power to recover or offset the overpaid amount necessary. 21. Subitem 7(3) provides that, if the amount paid by the affected student is more than the amount that could have been paid to the higher education provider had the relevant amendment been in force during the transition period, the higher education provider must pay to the affected student an amount equal to the difference between the 2 amounts. 22. Section 93-10 of HESA specifies the maximum student contribution amounts for grandfathered and non-grandfathered students for units of study in the different funding clusters. In accordance with section 19-95 of HESA, a higher education provider is required to give the Minster a schedule of student contribution amounts for places it proposes to provide and, where the provider determines more than one student contribution amount for place in a unit, must ensure that there is sufficient detail for a person to work out which amount applies to them. Under section 36-50 of HESA, a higher education provider must not accept up-front payments of more than 90% of student contribution amounts. As such, the amount referred to in subitem 7(2) as the amount that could have been paid to the higher education provider had the relevant amendment been in force during the transition period, is 90% of the grandfathered student contribution amount that applied to the relevant unit or units. 14


Item 8 - Partial up-front payments made during transition period 23. Item 8 sets out the actions that a higher education provider must take where an affected student has made a partial up-front payment of the student contribution amount for a unit with a census date during the transition period. The student contribution amount an affected student paid as a non-grandfathered student will be higher than the amount the student would have paid had they been treated as a grandfathered student during the transition period, which will impact the amount of an affected student's HELP loan and may change the discount that should have been provided if the up-front payment/s that were made constitute 90% or more of the grandfathered student contribution amount. 24. Subitem 8(1) sets out the circumstances in which item 8 applies. It provides that item 8 applies if: • during the transition period, an affected student made one or more upfront payments to a higher education provider in relation to a unit of study; and • the amount of that payment, or the sum of those payments is less than 90% of the affected student's old student contribution amount for the unit; and • the Commonwealth paid the following amounts to the higher education provider in relation to the student and the unit: o an amount under paragraph 96-2(3)(b) of the HESA (payment of the HECS-HELP loan amount to the provider); o an amount under subsection 96-2(4) of HESA (payment of the 10% discount amount to the provider). 25. Subitem 8(2) provides that, if the amount (the old amount) paid in accordance with paragraph 96-2(3)(b) or subsection 96-2(4) of HESA, is more than the amount (the new amount) that would have been paid to the provider had the relevant amendment been in force during the transition period, the difference between the old amount and the new amount may be: • deducted from any amount that is payable, or to be paid, to the higher education provider under the HESA; or • recovered by the Commonwealth from the higher education provider as a debt due to the Commonwealth. 26. As the grandfathered student contribution amount is less than the non-grandfathered contribution amount, the amount that would have been paid by the Commonwealth to the provider in respect of an affected student under paragraph 96-2(3)(b) and subsection 96-2(4) or section 96-3 before the commencement of the relevant amendment is more than the amount that would have been paid during the transition period if the student was treated as grandfathered. As such, the Commonwealth will have overpaid providers and a mechanism for offset or recovery of the overpaid amount is necessary. 27. Subitem 8(3) provides that, if the amount paid by the affected student is more than the amount that could have been paid to the higher education provider had the relevant amendment been in force during the transition period, the higher education provider must pay to the affected student an amount equal to the difference between the 2 amounts. 15


28. Section 93-10 of HESA specifies the maximum student contribution amounts for grandfathered and non-grandfathered students for units of study in the different funding clusters. In accordance with section 19-95 of HESA, a higher education provider is required to give the Minster a schedule of student contribution amounts for places it proposes to provide and, where the provider determines more than one student contribution amount for place in a unit, must ensure that there is sufficient detail for a person to work out which amount applies to them. Under section 36-50 of HESA, a higher education provider must not accept upfront payments of more than 90% of student contribution amounts. As such, the amount referred to in subitem 8(3) as the amount that could have been paid to the higher education provider had the relevant amendment been in force during the transition period, is 90% of the grandfathered student contribution amount that applied to the relevant unit/s. 29. Subitem 8(4) provides that the higher education provider must, on the Secretary's behalf, re-credit the affected student's HELP balance with an amount (the relevant amount) that is equal to the difference between the amount paid by the Commonwealth to the provider in accordance with paragraph 96-2(3)(b) of HESA and the amount that would have been paid under paragraph 96-2(3)(b) had the relevant amendment been in force during the transition period. This ensures that an affected student's HELP balance is re-credited by an amount that means their HELP balance is what it would have been had the student been treated as a grandfathered student at all times during the transition period. 30. Subitem 8(5) provides that an affected student's HECS-HELP debt in relation to the unit of study is taken to be remitted by an amount equal to the relevant amount for the purposes of HESA. This provides for remission of an affected student's HECS-HELP debt equivalent to the amount of HELP Balance that is re-credited and in circumstances not captured by subsection 137-5(4). Item 9 - No upfront payments made during transition period 31. Item 9 sets out the new actions that a higher education provider must take where an affected student has made no up-front payments for a unit with a census date during the transition period. In this situation, the affected student has received HECS-HELP assistance for the entire student contribution amount (i.e. this amount was paid by the Commonwealth to the provider). The student contribution amount an affected student paid as a non-grandfathered student will be higher than the amount the student would have paid had they been treated as a grandfathered student, which will impact the HELP Balance of the student. 32. Subitem 9(1) provides that item 9 applies if, during the transition period: • under section 96-1 of HESA, the Commonwealth: (i) as a benefit to an affected student, lent to the student an amount of HECS-HELP assistance for a unit of study with a higher education provider; and (ii) paid to the provider the amount lent in discharge of the student's liability to pay their student contribution amount for the unit; and • the affected student did not make any up-front payments in relation to the unit. 16


33. Subitem 9(2) provides that, if the amount paid by the Commonwealth is more than the amount that would have been paid to the higher education provider had the relevant amendment been in force during the transition period, the difference between the 2 amounts may be: • deducted from any amount that is payable, or to be paid, to the higher education provider under HESA; or • recovered by the Commonwealth from the higher education provider as a debt due to the Commonwealth. 34. Subitem 9(3) provides that a higher education provider must, on the Secretary's behalf, re-credit the affected student's HELP balance with an amount (the relevant amount) that is equal to the difference between the amount that was paid to the provider and the amount that would have been paid in relation to the affected student, had the relevant amendment been in force during the transition period. 35. This allows for an affected student's HELP balance to be re-credited by the difference between the student contribution amount for grandfathered and non-grandfathered students. This is different to the re-credit provisions in Division 97 of HESA which only allow for a student's HELP balance to be re-credited with an amount equal to the amounts of HECS-HELP assistance that the person has received for a unit of study. 36. Subitem 9(4) provides that an affected student's HECS-HELP debt in relation to the unit of study is taken to be remitted by an amount equal to the relevant amount for the purposes of HESA. This provides for remission of an affected student's HECS-HELP debt equivalent to the amount of HELP Balance that is re-credited and in circumstances not captured by subsection 137-5(4). Item 10 - Secretary may act if provider is unable to 37. Item 10 provides that, if the higher education provider is unable to act for one or more of the purposes of subitem 8(4) or 9(3), the Secretary may act as if one or more of the references in those provisions to the provider were a reference to the Secretary. 38. This will allow the Secretary to re-credit an affected student's HELP balance in the circumstances set out in items 8 and 9, where the higher education provider is unable to do so. 39. The Secretary having the power to re-credit a student's HELP balance where the higher education provider is unable to do so is consistent with other re-crediting provisions in HESA (see subsections 97-27(2), 97-42(2), 97-45(2) and 97-50(2)). Item 11 - Interaction with the Higher Education Support Act 2003 40. Item 11 provides that the obligations imposed on a higher education provider under Part 2 of Schedule 1 of the Bill are taken, for the purposes of HESA, to be conditions of a grant made to the provider under Part 2-2 of that Act. 17


41. Division 36 of the Act sets out conditions of receiving a grant under Part 2-2 of HESA. If a higher education provider breaches a condition of a grant made under Part 2-2, the provider's Part 2-2 grant amount may be reduced under Part 2-2 of HESA, if determined by the Minister. Section 22-15 of HESA also provides that a higher education provider's approval can be revoked if the provider breaches a condition of grant. Item 12 - Transitional rules 42. Item 12 deals with transitional rules relating to the amendments, or repeals, made by Schedule 1 of the Bill, with certain limits imposed. This rule making power is intended to be beneficial for affected students as it ensures that no student is negatively affected by the possible delayed commencement of Schedule 1 of the Bill. In particular, sections 96-1, 96-2 and 96-3 of HESA are proposed to be amended and repealed by measures contained in Schedules 1 and 4 of the Education Legislation Amendment (2022 Measures No. 1) Bill 2022. The commencement of those measures before the commencement of Schedule 1 of the Bill may require different rules than those contained in Part 2 of Schedule 1 of the Bill for the period between the commencement of Schedules 1 and 4 of the Education Legislation Amendment (2022 Measures No. 1) Bill 2022 and commencement of Schedule 1 of the Bill. 43. Subitem 12(1) enables the Minister to make, by legislative instrument, rules prescribing matters of a transitional nature (including prescribing any saving or application provisions) relating to the amendments or repeals made by Schedule 1 of the Bill. The delegation of legislative power in subitem 12(1) is appropriate in the circumstances because the rules prescribe matters of a transitional nature relating to the amendments or repeals made by Schedule 1, and, as noted above, are necessary in order to keep the legislation up to date in the event that the commencement of Schedule 1 is delayed. 44. Subitem 12(2) clarifies that, without limiting subitem 12(1), rules made under item 12 before the end of 12 months starting on the day Schedule 1 of the Bill commences may provide that provisions of Schedule 1, or any other Act or instrument, have effect with any modifications prescribed by the rules. Those provisions then have effect as modified. 45. For the avoidance of doubt, subitem 12(3) clarifies that the rules may not do the following: • create an offence or civil penalty; • provide powers of arrest or detention or entry, search or seizure; • impose a tax; • set an amount to be appropriated from the Consolidated Revenue Fund under an appropriation in this Act; • directly amend the text of this Act. 46. Subitem 12(4) clarifies that schedule 1 of the Bill (other than subitem 12(3)) does not limit the rules that may be made for the purposes of subitem 12(1). 18


Schedule 2--HELP debt arrangements for certain rural, remote or very remote health practitioners Higher Education Support Act 2003 Part 1 - Amendments 47. The main purpose of this Part is to create new Division 144 in Part 4-1 of HESA to enable, on application, the partial or complete reduction of outstanding Higher Education Loan Program (HELP) debts for eligible health practitioners (medical practitioners and nurse practitioners) working in rural, remote or very remote areas of Australia. The amendments also allow for the waiver of indexation in relation to eligible health practitioners' HELP debts while they are completing eligible work in a rural, remote, or very remote area. 48. This measure is intended to encourage initial employment, and increased retention, of health practitioners to work in rural, remote or very remote areas of Australia, addressing issues of equity and access to healthcare in these areas. 49. This Part also makes some consequential amendments to Division 142 of HESA, which contains a similar measure which operates in respect of teachers working in very remote locations of Australia. Item 1 - Subsection 128-25(3) 50. Item 1 makes a technical amendment to ensure that the new HELP debt measure for health practitioners operates consistently with the existing measure outlined in Division 142 of HESA for very remote teachers. The amendment made by item 1 amends subsection 128-25(3) of HESA. Section 128-25 of HESA provides for the re- crediting of HELP balances where debts have been reduced. Item 1 amends subsection 128-25(3) to list new section 144-10 (which enables the reduction of HELP debts for certain health practitioners) next to a similar provision (section 142- 15) for very remote teachers. Item 2 - Section 129-1 51. Item 2 repeals and substitutes the last paragraph in the summary for Chapter 4 of HESA that is contained in section 129-1. The revised text reflects the operation of new Division 144 and the consequential changes to existing Division 142. 19


Item 3 - Section 134-5 52. Item 3 repeals and substitutes section 134-5 of HESA (which currently sets out what the 'Very Remote HELP Debtor Guidelines' may deal with--noting that those Guidelines will be remade to reflect their new name). New section 134-5 provides that matters relating to location-preferred HELP debtors (teachers) are dealt with in the HELP Debtor Guidelines (Teachers), while matters relating to location-preferred HELP debtors (health practitioners) are dealt with in the HELP Debtor Guidelines (Health Practitioners). 53. Both of these Guidelines are legislative instruments. The section also provides that the provisions of Part 4-1 of HESA indicate when a particular matter is, or may be, dealt with in those Guidelines, which are made by the Minister under section 238- 10 of HESA (as explained in the Note to section 134-5). Guidelines are needed to specify a range of details that inform the beneficial operation of the debt and indexation reduction measures to ensure that the measures can be targeted appropriately at the teaching and health practitioners intended to be supported. Item 4 - At the end of paragraph 140-1(3)(d) 54. Section 140-1 of HESA provides an outline of the 2 stages for determining a person's accumulated HELP debt for a financial year. Item 4 adds a reference to section 144-10 in paragraph 140-1(3)(d) to reflect that reduction of HELP debts under new section 144-10 are to be taken into account when calculating a person's accumulated HELP debt under stage 2. Items 5 and 6 - Paragraph 140-10(1)(a) and Subsection 140-10(1A) (at the end of the definition of B) 55. Section 140-10 of HESA sets out how to work out the HELP indexation factor for a person for 1 June in a financial year. 56. Item 5 adds a reference to section 144-5 to paragraph 140-10(1)(a). The effect of this change is that, if the Secretary has determined under existing section 142-10 or under new section 144-5 that the indexation of the person's accumulated HELP debt for the financial year is to be reduced, then the person's HELP indexation factor for 1 June in a financial year is calculated using the existing formula in subsection 140-10(1A), as amended. 57. Item 6 adds a reference to subsection 144-5(2) to the definition of "B", which is used in the formula in subsection 140-10(1A). Under the definition as amended, "B" means the number of days in the applicable calendar year determined for the person by the Secretary under subsection 142-10(2) or 144-5(2) (that is, the amendment now ensures the formula operates for both very remote teachers and the health practitioners supported by this new measure). 20


Items 7 to 9 - Subsection 140-25(1) (formula), Subsection 140-25(1) and Subsection 140- 25(1) (definition of very remote HELP debtor reduction) 58. Subsection 140-25(1) of HESA sets out the formula for calculating a person's accumulated HELP debt for a financial year. 59. Item 7 repeals and substitutes the formula. The only substantive change in the formula relates to the last step, with the concept of 'Very remote HELP debtor reduction' being replaced by the new concept of 'Location-preferred HELP debtor reduction' (to encompass the existing measure that relates to very remote teachers and the new measure for health practitioners). 60. Item 8 inserts a new definition of 'location-preferred HELP debtor reduction'. This term is defined to mean the amount by which the person's accumulated HELP debt is to be reduced as a result of a determination made by the Secretary in relation to the person under section 142-15 or 144-10: (a) on or after 1 June in the preceding financial year; and (b) before 1 June in the relevant financial year, as applicable. 61. Item 9 repeals the definition of 'very remote HELP debtor reduction'. This definition is no longer required given the new definition of 'location-preferred HELP debtor reduction'. Items 10 to 12 and 14 - Division 142 (heading), Section 142-1 (heading), Subsection 142- 1(1) and Paragraph 142-1(3)(c) 62. Division 142 contains special measures for very remote HELP debtors (teachers) and section 142-1 defines 'very remote HELP debtor'. 63. Items 10 and 11 amend the headings for Division 142 and section 142-1, while items 12 and 14 amend subsections 142-1(1) and paragraph 142-1(3)(c) - in each instance, 'very remote HELP debtor' is renamed 'location-preferred HELP debtor (teacher)' to ensure that the new measure for health practitioners works consistently alongside the existing provisions that operate in Division 142 for very remote teachers. Items 13 and 15 - Subsection 142-1(3) and Subsection 142-5(2) 64. Subsection 142-1(3) enables the Very Remote HELP Debtor Guidelines to set out various matters for the purposes of Division 142. Similarly, subsection 142-5(2) enables the Very Remote HELP Debtor Guidelines to specify courses of study that are, or are not, courses of study in education as defined in subsection 142-5(1). 65. Items 13 and 15 replace the reference to the 'Very Remote HELP Debtor Guidelines' with a reference to the 'HELP Debtor Guidelines (Teachers)' in subsection 142-1(3) and subsection 142-5(2), respectively. These changes are consequential to the amendment to section 134-5 in item 3, and ensure that the new measure for health practitioners works consistently with the existing measure for very remote teachers. 21


Items 16 to 29 - Sections 142-10 and 142-15 66. Items 16 to 29 make further technical amendments to existing Division 142 of HESA, which relate to very remote teachers. These include consequential amendments to reflect the changes made by inserting new Division 144 and changes to provide for consistency between Division 142 and new Division 144. 67. The items replace references to 'Very Remote HELP Debtor Guidelines' with references to 'HELP Debtor Guidelines (Teachers)', and references to 'very remote HELP debtor' with references to 'location-preferred HELP debtor (teacher)' in a number of provisions to reflect the new terminology used for the existing measure that operates under Division 142 for very remote teachers. Note that items 22 and 28 align the time period that the Secretary has to consider an application for HELP debt reduction or indexation reductions under sections 142-10 and 142-15 with the period that applies to the new measure for health practitioners (the period is 60 days or any longer period determined by the Secretary in relation to the application--see new sections 144-5 and 144-10 described below). Item 30 - At the end of Part 4-1 68. Item 30 inserts new Division 144 at the end of Part 4-1 of HESA. Division 144 - Special measures for location-preferred HELP debtors - health practitioners 69. New Division 144 deals with special measures for certain HELP debtors who are health practitioners referred to as a 'location-preferred HELP debtor (health practitioner)'. Section 144-1--Meaning of location-preferred HELP debtor (health practitioner) 70. New subsection 144-1(1) defines this term and states that a person is a 'location- preferred HELP debtor (health practitioner)' in relation to a course of study if: • the person has completed a course of study covered; and • the course of study is covered by subsection (2); and • the person incurred a HECS-HELP debt or a FEE-HELP debt in relation to the course of study; and • the person holds registration or accreditation as a kind of health practitioner for the course of study specified by the HELP Debtor Guidelines (Health Practitioners) (the Guidelines); and • the person carries out work as that kind of health practitioner in the circumstances (if any) specified in the Guidelines; and • the work is carried out in an area specified by the Guidelines, by reference to the ABS Remoteness Structure, as a rural area, a remote area or a very remote area; and • the number of hours during which the person carries out work is not less than the minimum number of hours (if any) specified for a health practitioner of that kind by the Guidelines; and • the person satisfies any other applicable requirements specified by the Guidelines. 22


71. New section 144-1 makes clear that the program will only apply to those who have incurred HELP debts in obtaining registration or accreditation as a health practitioner and who carry out work in a rural, remote or very remote area. It is necessary and appropriate for the other requirements of the program, such as details of the kind of health practitioner to fall within the meaning of a 'location- preferred HELP debtor', the type of work to be carried out, and the location for that work to be carried out to be eligible for the program, to be set out in the Guidelines. 72. It is essential that the detailed eligibility requirements and the participants' obligations to accrue the benefits under the program be contained in the Guidelines to enable the program to be tailored specifically and appropriately for the communities which it is intended to benefit. Setting out these details in the Guidelines will allow the Commonwealth to quickly respond and fine-tune the details of the program as more information becomes available about the uptake of the initiative and suitability of the eligibility requirements, and as the outcomes of complementary programs seeking to address health workforce shortages become known. Setting out these details in the Guidelines will allow the Commonwealth to tailor the incentive, swiftly respond to unintended consequences, and give the Commonwealth a mechanism to respond quickly to health workforce shortages in rural, remote and very remote Australia, and increase responsiveness to future health crises. 73. Subsection 144-1(2) sets out eligible courses of study in respect of which the new measure operates (that is, in respect of which HELP debt or indexation reduction is possible). This provision states that a course of study in medicine, and a course which would enable a person to be registered as a nurse practitioner, are eligible courses of study for this purpose, where they are specified in the Guidelines. The Guidelines may also specify other courses. 74. Subsection 144-1(3) provides that the Guidelines may also set out: • circumstances in which a person is taken, or is taken not, to carry out work as a location-preferred HELP debtor (health practitioner) as a particular kind of health practitioner; or • circumstances in which a person is taken, or is taken not, to carry out such work in a rural area, a remote area or a very remote area; or • circumstances in which a person is taken, or is taken not, to be a location- preferred HELP debtor (health practitioner) in relation to a course of study for particular periods. Section 144-5--Reducing indexation of accumulated HELP debts 75. New section 144-5 deals with the process for when the Secretary may determine that the indexation of a person's accumulated HELP debt for a course of study is to be reduced. 76. Under subsection 144-5(1), the Secretary must determine that indexation is to be reduced in relation to a financial year if: 23


• on 1 June of the financial year in relation to which the application is made, the person has an accumulated HELP debt for the course of study; and • the Secretary is satisfied that the person: (i) was a location-preferred HELP debtor (health practitioner) in relation to the course of study at any time during the calendar year (the applicable calendar year) ending on 31 December in the financial year; and (ii) has met such other requirements (if any) as are specified in the HELP Debtor Guidelines (Health Practitioners). 77. Subsection 144-5(2) provides that, if the Secretary determines that the indexation of the person's accumulated HELP debt for a course of study is to be reduced in relation to a financial year, the Secretary must determine the number of days in the applicable calendar year in respect of which the person was a location-preferred HELP debtor (health practitioner) for the course of study. 78. Subsection 144-5(3) sets out the notice requirements in relation to the Secretary's decision. The notice must be in writing and, if the application is successful, state the number of days determined by the Secretary under subsection 144-5(2). 79. Subsection 144-5(4) clarifies that the notice needs to be provided within 60 days after the day the Secretary receives the application for indexation reduction under subsection 144-5(6), or any longer period, not exceeding 6 months, as determined in writing by the Secretary in relation to the application. This power to extend is exercisable in respect of individual applications only, not as a general power to extend the period of all applications. The usual decision-making period is expected to be within 60 days and the Secretary's discretion to extend is only intended to be exercised in relation to individual applications that are particularly complex. The Note in this subsection signposts the operation of section 206-5 of HESA, which operates on the basis that the Secretary is taken to have made a decision to reject the application if the Secretary does not notify the person of the decision within the required 60 day period (or such longer period as determined by the Secretary) to ensure that the person has an operative and reviewable decision within a reasonable time after making their application. 80. Where an application is successful, the Secretary must also give a copy of the notice to the Taxation Commissioner in accordance with subsection 144-5(5). 81. Subsection 144-5(6) deals with the application for a decision under this section and provides that an application must be in writing, in the form (if any) approved by the Secretary and accompanied by the information (if any) required by the Secretary. An application must also include the person's tax file number and meet any requirements specified by the HELP Debtor Guidelines (Health Practitioners). 82. Subsection 144-5(7) provides that the Secretary may refuse to consider an application until the Secretary is satisfied that the application complies with the requirements set out in subsection 144-5(6). Section 144-10--Reducing accumulated HELP debts 83. New section 144-10 deals with the process by which the Secretary may determine that a person's accumulated HELP debt for a course of study is to be reduced by a specified amount. 84. Subsection 144-10(1) states that the Secretary must determine that a person's accumulated HELP debt is to be reduced where the Secretary is satisfied that the person: 24


• has been a location-preferred HELP debtor (health practitioner) (as defined in section 144-1) in relation to the course of study for one or more periods that, in total, are not less than the relevant minimum period specified for the course of study by the HELP Debtor Guidelines (Health Practitioners); and • has met such other requirements as are specified in those Guidelines. 85. Subsection 144-10(2) deals with the amount that an accumulated HELP debt may be reduced by, stating that the debt reduction must not be more than the lesser of: • the sum of the amounts of HECS-HELP debt and FEE-HELP debt incurred by the person in respect of units of study with a total EFTSL value not exceeding the maximum amount for the course of study specified in the HELP Debtor Guidelines (Health Practitioners) and undertaken as part of the course of study; and • the amount of the person's accumulated HELP debt for the course of study on the day the person first becomes a location-preferred HELP debtor (health practitioner) in relation to the course of study. 86. Subsection 144-10(3) states that, for the avoidance of doubt, a person's accumulated HELP debt for a financial year can be reduced to be less than zero. 87. Subsection 144-10(4) sets out how a person must be notified of the Secretary's determination under subsection 144-10(1). The notice must be in writing and, if the application is successful, state the amount of the debt reduction. 88. Subsection 144-10(5) clarifies that the notice needs to be provided within 60 days after the day the Secretary receives the application for debt reduction under subsection 144-10(7), or any longer period, not exceeding 6 months, determined in writing by the Secretary in relation to the application. As noted above in relation to subsection 144-5(4), this power is exercisable in respect of individual applications only, not as a general power to extend the period of all applications. The usual decision-making period is expected to be within 60 days, and the Secretary's discretion to extend will only be exercised in relation to individual applications that are particularly complex. The Note in this subsection signposts the operation of section 206-5 of HESA, which operates on the basis that the Secretary is taken to have made a decision to reject the application if the Secretary does not notify the person of the decision within the required 60 day period (or such longer period as determined by the Secretary) to ensure that the person has an operative and reviewable decision within a reasonable time after making their application. 89. Subsection 144-10(6) provides that, where an application is successful, the Secretary must also give a copy of the notice to the Taxation Commissioner. 90. Subsection 144-10(7) deals with the application for a determination under this subsection and provides that an application must: • be in writing and in the form (if any) approved by the Secretary; • be accompanied by the information (if any) required by the Secretary; • include the person's tax file number; and • meet any requirements specified by the HELP Debtor Guidelines (Health Practitioners). 91. Subsection 144-10(8) provides that the Secretary may refuse to consider an application until the Secretary is satisfied that the application complies with the requirements set out in subsection 144-10(7). 25


Section 144-15--Refunding amounts 92. New section 144-15 deals with circumstances where a debt reduction determination under subsection 144-10(1) is made in relation to an amount that exceeds the sum of the amount required to discharge the total debt that the person owed to the Commonwealth under HESA and the total amount of the person's primary tax debts (within the meaning of Part IIB of the Taxation Administration Act 1953). In that case, the Commonwealth is required to refund to the person an amount equal to that excess. Such refunds will be made from the standing appropriation specified in section 238-12 of HESA. Items 31 and 32 - Section 206-1 (at the end of the cell at table item 2AA, column headed "Provision under which decision is made"; at the end of the cell at table item 2AAB, column headed "Provision under which decision is made") 93. Items 31 and 32 ensure that the indexation reduction and debt reduction determinations that the Secretary may make under new sections 144-5 and 144-10, respectively, are listed as reviewable decisions and, as such, are subject to internal review and external merits review by the Administrative Appeals Tribunal under Part 5-7 of HESA. Items 33 to 36 - Section 238-10 94. Items 33 to 36 make a number of technical amendments to section 238-10 of HESA, which deals with making Guidelines. 95. Item 36 inserts new subsections 238-10(4) and 238-5(5). 96. New subsection 238-10(4) provides that the Minister must consult with the Treasurer before specifying a health practitioner in the HELP Debtor Guidelines (Health Practitioners) for the purposes of paragraph 144-1(1)(d). 97. New subsection 238-10(5) provides that, despite subsection 14(2) of the Legislation Act 2003, the HELP Debtor Guidelines (Health Practitioners) may make provision in relation to a matter by applying, adopting or incorporating, with or without modification, any matter contained in any other instrument or other writing as in force or existing from time to time. 98. This exception from the application of subsection 14(2) of the Legislation Act 2003 is needed to address the possibility that those Guidelines may refer to approved courses - for example, the course approved by the Nursing and Midwifery Board of Australia in relation to a nurse practitioner, or refer to the method for how a location is determined to be a rural, remote or very remote area - currently the Modified Monash Model. If such reference is made, the instrument will remain effective. If the instrument does make reference to a document as it exists from time to time, and that document is published, the explanatory material for the instrument will refer to how the publication may be accessed. 26


99. The specific enabling documents will be specified in the HELP Debtor Guidelines (Health Practitioners) and made freely available on or via link on the Department of Health website. Future changes to the HELP Debtor Guidelines (Health Practitioners), including any proposed change to an identified enabling document, or inclusion of an additional enabling document, will follow established processes for the amendment of secondary legislation. Items 37 and 38 - Subclause 1(1) of Schedule 1 100. Item 37 amends subclause 1(1) of Schedule 1 of HESA to insert new definitions for the terms 'location-preferred HELP debtor (health practitioner)' and 'location-preferred HELP debtor (teacher)' - the definitions refer to sections 144-1 and 142-1 of HESA, respectively. 101. Item 38 repeals the definition of 'very remote HELP debtor' from subclause 1(1) of Schedule 1 of HESA. Part 2 - Applications, saving and transitional provisions Item 39 - Application of amendments 102. Item 39 contains application provisions for the amendments in Schedule 2 of the Bill. 103. Subitem 39(1) states that the amendments made to sections 142-10 and 142-15 of HESA apply in relation to applications under those sections that are received by the Secretary on and after the commencement of this item (to ensure prospective application and to ensure that the existing law continues to apply in relation to applications made prior to commencement). 104. Subitems 39(2)-(3) relates to section 144-5 so that indexation can be reduced in respect of days that fall after 1 January 2022 to ensure the application of the measure in respect of indexation is applied during the 2022 calendar year onwards. 105. Subitems 39(4)-(5) provides that debt reduction under section 144-10 may apply in relation to a course of study whether completed before or after the commencement of this Part, however a person cannot be determined to be a 'location-preferred HELP debtor (health practitioner)' in relation to a course of study for a period if any part of the period occurred before 1 January 2022 (with the result that work performed prior to 1 January 2022 cannot be counted towards the required service for a HELP debt reduction). Item 40 - Saving provisions 106. Item 40 contains saving provisions. 107. Subitem 40(1) provides that a person who was a very remote HELP debtor immediately before the commencement of Schedule 2 of the Bill is taken, on and after that commencement, to be a location-preferred HELP debtor (teacher). 27


108. Subitem 40(2) provides that the Very Remote HELP Debtor Guidelines made under subsection 238-10(1) of HESA that were in force immediately before the commencement of Schedule 2 of the Bill continue in force (and may be dealt with) as if they were HELP Debtor Guidelines (Teachers) made under that subsection as amended by that Schedule. 28


 


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