13.6.2.1 Effect of Family Tax Benefit (FTB) Part A and B on VCES/MRCAETS Benefits

VCES and MRCAETS are Prescribed Educational Schemes (PES) under the Social Security Act 1991.

A child under 16 years of age who is in receipt of payments under a PES is not precluded from payment of FTB Part A (or Part B if applicable).

A child between 16 and 24 years of age who is in receipt of payments under a PES is precluded from payment of FTB Part A (or Part B if applicable).

13.6.4.1 Overview of Schoolkids Bonus

The Schoolkids Bonus ceased in December 2016.

The Schoolkids Bonus assisted with education costs for primary and secondary students who received an education allowance under the Veterans Children’s Education Scheme (VCES) or the Military Rehabilitation and Compensation Act Education and Training Scheme (MRCAETS).

The Schoolkids Bonus was an education payment that replaced the Education Tax Offset claimable through the Australian Taxation Office (ATO).

The payment provided funding for families to assist with their children’s education costs such as uniforms and text books. It also assisted families to participate in educational opportunities such as camps and excursions.

The Schoolkids Bonus was paid in January and July each year but was discontinued in December 2016, with the last instalment being paid in July 2016.

In addition to the ongoing Schoolkids Bonus, the Primary School Start-up Payment was paid as a one-off payment on commencement of the first year of primary school.

The Schoolkids Bonus and Primary School Start-up Payment eligibility rested on the qualifying payment of an education allowance paid under the VCES or the MRCAETS for primary and full-time secondary school students and the payments were therefore paid automatically.

Payments were tax free and did not count for income support purposes.

13.6.4.2 Definitions for Schoolkids Bonus

The Schoolkids Bonus ceased in December 2016.

Bonus Test Day 1 January and 30 June

Completed Year 12 Please see A New Tax System (Family Assistance) Act 1999, section 22B Meaning of senior secondary school child.

Current Education Period The six months following the bonus test day. That is, if the bonus test day was 1 January, the current education period was January to June. If the bonus test day was 30 June, the current education period was July to December.

Education Allowance An annual or fortnightly payment under:

• Parts 3.2, 3.3, 3.4, 3.6 or 3.6A of the VCES; or
•  Parts 3.2, 3.3, 3.4 or 3.6 of the MRCAETS.

See also Part 13.3 of this Manual.

Eligible Individual A student who had met the criteria set out in Part 13.6.4.3 of this Manual: Eligibility for Schoolkids Bonus.

Eligible School Leaver A student who had met the criteria set out in Part 13.6.4.3 of this Manual: Eligibility for School Leaver Payment – Final Schoolkids Bonus Instalment .

Full-time Secondary Study Please see Schedule 1 of Student Assistance (Education Institutions and Courses) Determination 2009 (No.2).

Please note that those attending TAFE or university but studying a secondary course or a university preparatory course (as defined by the above instrument) were eligible to receive the Schoolkids Bonus. What is more, those studying a university preparatory course may also have been eligible to receive a Scholarship.

New School Student A student who had met the criteria set out in Part 13.6.4.3 of this Manual: Eligibility for Start-up Schoolkids Bonus - New Primary School Student.

Previous Education Period The six months prior to the bonus test day

Primary School Rate Please see the rates chart .

Qualifying Payment The education allowance paid under the VCES or the MRCAETS. See also Part 13.3 of this Manual.

Secondary School or equivalent Please see Schedule 1 of Student Assistance (Education Institutions and Courses) Determination 2009 (No.2).

Secondary School Rate Please see the rates chart.

13.6.4.3 Eligibility

The Schoolkids Bonus ceased in December 2016.

To be eligible to receive the ongoing Schoolkids Bonus:

• the parent/guardian or student must have been receiving an education allowance under the VCES or the MRCAETS; and
• the student:

Eligibility for Start-up Schoolkids Bonus - New Primary School Student

Parents of students were eligible for the Start-up Schoolkids Bonus if they:

• were in receipt of an education allowance on the bonus test day; and
• they intended their child to go to primary school (or the student was attending primary school) for the first time for at least one day during the current education period.

The rate of Start-up Schoolkids Bonus was equal to the primary school rate.

Example 1

As at 1 January 2013, the parents of 5 year old Ryan, intend to send him to primary school for the first time and were granted education allowance from 1 January 2013, but subsequently moved the family overseas and thus did not start Ryan in school in Australia. The parents retained the Schoolkids Bonus because the education allowance was not recovered and they were only required to have intended that the child was to go to school to receive the Schoolkids Bonus.

Example 2

Amelia’s parents became eligible for an education allowance on 1 January 2013 because they intended for Amelia to start primary school for the first time that year. Amelia did not commence primary school until April 2013 because of the school’s age policy. However, Amelia’s parents were eligible for the Start-up Schoolkids Bonus of January 2013 because Amelia undertook primary education for the first time on at least one day during the current education period.

Example 3

Dean’s father died of war-causes in July 2013 and his mother moved back to Australia in August 2013 with Dean commencing primary school for the first time then. At the same time, Dean’s mother applied for the MRCAETS. She received the annual primary education allowance amount, and because Dean undertook at least one day of primary education for the first time during the current education period (June-December), and the annual education allowance covers the whole year, was eligible for the Start-up Schoolkids Bonus.

Example 4

Lisa commenced primary school for the first time in February 2013 but her parents only applied for MRCAETS in August 2013. The education allowance was backdated to 1 January 2013 because Lisa’s father was assessed the previous December as suffering from a service-related injury at 80 impairment points under the MRCA. As well as a backdated education allowance to 1 January 2013, Lisa’s parents received one backdated Start-up Schoolkids Bonus and one Schoolkids Bonus payment.

Eligibility for School Leaver Payment – Final Schoolkids Bonus Instalment

To receive a School Leaver Payment the student must have met the following requirements:

• have undertaken primary or secondary education for at least one day in 2012;
• completed Year 12 of secondary school or equivalent in the previous education period for the bonus test day;
• been in receipt of an education allowance during the previous education period; and
• notified the Department of completion of secondary school within 13 weeks from the bonus test day closest to the date of completion.

The student must also have met the following age requirements:

• on the bonus test day of 1 January the student must have been aged under 20 or have turned 20 on the bonus test day; or
• on the bonus test day of 30 June the student must have been aged under 19 or have turned 19 during the calendar year in which the bonus test day occurred.

Those who left their final year of secondary school early do not qualify for the School Leaver Payment (see section 22B(4) of a The New Tax System (Family Assistance) Act 1999). A student can be considered eligible, however, for this payment if they left school early due to sickness, disability or special circumstances.

Example 1

John met the above requirements with an official secondary school completion date of 15 November 2013 and received the School Leaver Payment.

Example 2

Jenny met the above requirements with an official secondary school completion date of 30 April 2013. Jenny received a School Leaver payment in relation to the 30 June 2013 bonus test day.

13.6.4.4 Receiving the Schoolkids Bonus

The Schoolkids Bonus was paid every January and July, ceased in December 2016 with the last instalment paid in July 2016.

Parents or Guardians

A parent or guardian received the Schoolkids Bonus in relation to an eligible individual if they received an education allowance on behalf of the child during the previous education period in relation to the bonus test day.

Students

A student received the Schoolkids Bonus if they were deemed an eligible individual and were receiving their education allowance during the previous education period in relation to the bonus test day.

Shared Care – Receiving both an education allowance and Family Tax Benefit (FTB) (students under the age of 16)

If a parent or guardian received a proportion of an education allowance because they shared the care of an eligible individual child with a former spouse/partner, then the proportion of the Schoolkids Bonus that the parent received was the same as the proportion allocated under the FTB A formula. See the table below.

Example 1

A separated parent had 47 per cent custody to care for their child who had been deemed an eligible individual. The parent received 49 per cent (FTB shared care payment percentage) of the Schoolkids Bonus for that child.

Example 2

A separated parent had 35 per cent custody to care for their child who had been deemed an eligible individual. The parent received 25 per cent (FTB shared care payment percentage) of the Schoolkids Bonus for that child.

Shared Care – Receiving an education allowance only (FTB mutually exclusive for students aged 16 and over)

If parents each received a proportion of an education allowance because they shared the care of an eligible individual child with a former spouse/partner, then the proportion of the Schoolkids Bonus that each parent received was the same as for the education allowance (which was determined according to the FTB A formula).

Example

Separated parents shared custody on a 47/53 split to care for their child who had been deemed an eligible individual and the parents elected to receive the education allowance rather than FTB. The parent who provided 47 per cent of the care received 49 per cent of the education allowance and thus will received 49 per cent of the Schoolkids Bonus. The parent who provided 53 per cent of the care then received 51 per cent of the education allowance and 51 per cent of the Schoolkids Bonus.

Death of a student

Consistent with VCES and MRCAETS policy, if an eligible student died, the education allowance ceased on notification of the death and therefore no further Schoolkids Bonus was paid.

Overseas Students

If a child moved overseas before 30 June or 1 January test dates, they would have been considered as not undertaking school on the bonus test day and not in receipt of a qualifying payment and therefore not eligible for the Schoolkids Bonus.

If the child moved overseas on 1 July or 2 January (after the test date) and had met all the eligibility criteria for their most recent bonus test day for the previous education period (six months), they were eligible to receive the Schoolkids Bonus.

A child who moved overseas on the bonus test day was entitled to the Schoolkids Bonus only if they were also granted an education allowance that covered the test day.

There are some exceptions where a client may have continued to receive the education allowance whilst studying overseas if approved [see 13.2.3.4 Place of Study]. In this case, as were receiving the qualifying payment (education allowance), they would also have received the Schoolkids Bonus.

Income Management

If a client was Income Managed (see DVA Factsheet IS150 Welfare Payment Reforms), the Schoolkids Bonus was also Income Managed. The client may have been in receipt of income support such as Service Pension or Income Support Supplement from DVA or Family Tax Benefit from the Department of Human Services. Please note that DVA education allowance is not Income Managed because they are considered to be compensation payments.

13.6.4.5 Payment Amounts

For the 2016 rates of Schoolkids Bonus, please see the  rates chart .

13.6.4.6 Payment Errors

The Schoolkids Bonus ceased December 2016; with the last payment being July 2016.

DVA was paying the Schoolkids Bonus under family assistance law and the social security law and thus were agents of DSS. As a result, it was not VEA or MRCA legislative provisions that applied to the Schoolkids Bonus.

If the Schoolkids Bonus was paid in error, for example, the primary rate was paid instead of the secondary rate, the correct amount was to be paid to the person. If a student or parent/guardian received an education allowance fraudulently and therefore received a Schoolkids Bonus, DVA would recover both the fraudulent education allowance and the Schoolkids Bonus.

If a client wished to request a review they must have done so within 52 weeks of receiving the initial letter. An internal review was then conducted by a staff member who was not involved in the first decision. If a review was submitted after the 52 weeks and the decision could be changed, the client may only have received their entitlement from the date they requested the review.

If the original decision was affirmed by the reviewing officer, the client could go to the Social Security Tribunal (SSAT). If the previous decision was again affirmed by the SSAT, the client could then go to the Administrative Appeals Tribunal if they wished. Staff would need to have liaised with DHS if a client wished to appeal to the SSAT.

DHS also paid the Schoolkids Bonus to recipients such as those in receipt of FTB A. For mutual clients eligible to receive an education allowance and FTB A, DVA paid the Schoolkids Bonus. An automated clearance process occurs with DHS to ensure that two payments are not made to the same person for the same period. If, however, this does occur, one of the payments would need to have been recovered following liaison with DHS.

13.6.4.7 Income Management

The Schoolkids Bonus ceased in December 2016; with the last payment being July 2016.

DVA Education Schemes payments are not Income Managed because they are considered to be compensation payments.

If a client is in receipt of income support such as Service Pension or Income Support Supplement from DVA or Family Tax Benefit from the Department of Human Services which is Income Managed (see DVA Factsheet IS150 Welfare Payment Reforms), the Schoolkids Bonus must also have been Income Managed.

13.6.4.8 Legislative References

The Schoolkids Bonus ceased in December 2016.  The authority for this was:

• Minerals Resources Rent Tax Repeal and Other Measures Act 2014;

which received Royal Assent 5 September 2014.

The authority for the Schoolkids Bonus was derived from the:

 Family Assistance and Other Legislation Amendment (Schoolkids Bonus Budget Measures) Act 2012; and

 Social Security and Other Legislation Amendment (Further 2012 Budget and Other Measures) Act 2012.

The acts above amended the following:

 A New Tax System (Family Assistance) Act 1999;

 A New Tax System (Family Assistance) (Administration) Act 1999;

 Social Security Act 1991;

 Social Security (Administration) Act 1999; and

 Income Tax Assessment Act 1997.

There was no authority derived from DVA legislation.

13.6.5.1 Eligibility

DVA clients eligible to receive the Income Support Bonus must be:

•  receiving an education allowance under the VCES or the MRCAETS on 20 March and/or 20 September (test dates); and
•  in secondary or tertiary education and aged:
  • 16 years old or older; or
  • under 16 years old and are also in receipt of the education allowance rate of double orphan, homeless or living away from home.

No claim is required to be lodged for the Income Support Bonus

13.6.5.2 Receiving the Income Support Bonus

The Income Support Bonus is paid to the person or persons receiving the education allowance and is automatically paid into their bank account.

If a shared care arrangement exists for the payment of the education allowance (for separated parents), those proportions will be applied to the Income Support Bonus.

Amounts

The current Income Support Bonus amount can be found in the payment rates chart.

All Education Schemes students are considered and paid at the ‘single’ rate.

It is paid every six months in late March and September. These amounts increase in line with the Consumer Price Index. Indexation information can be found on the AustLII website.

Tax and Income Testing

The Income Support Bonus is tax-free, not subject to a means-test and is not included as income for income test purposes.

13.6.5.3 Department of Human Services (DHS)

The Income Support Bonus paid by DHS (now known as Services Australia) ceased in December 2016, with the last payment to their clients being Septemer 2016.  The information below is for historical purposes only.

Income Management

The Income Support Bonus is not Income Managed for DVA clients in receipt of an education allowance under the VCES or MRCAETS as their education allowance (ie: their primary payment) is not subject Income Management.

See DVA Factsheet: Welfare Payment Reforms IS150

Defence Force Income Support Allowance (DFISA)

DHS clients whose social security payments were reduced to nil because their DVA Disability Compensation Payment (previously known as Disability Pension) was included in the means-test but received DFISA, were eligible for the Income Support Bonus (as though they were in payment of their social security payment) from DHS.　

Despite the DFISA name including the word ‘allowance’, the eligibility for the Income Support Bonus was derived from the social security payment, not DFISA itself.

DFISA was no longer needed from 1 January 2022 because Disability Compensation Payments became exempt income for social security payment assessment purposes.

13.6.5.4 Recoveries

The Income Support Bonus paid by DHS ceased December 2016, with the last payment being September 2016. 

Only one Income Support Bonus payment can be paid to a student or parent in relation to a test date (20 March or 20 September).

The following are examples of when a payment is recovered.

1. If both DVA and DHS paid the Income Support Bonus to a student or parent in relation to a test date, DHS would recover the additional payment.

2. If DVA pays two Income Support Bonuses by mistake to a student or parent in relation to a test date, DVA would recover the additional payment.

3. If a client provides fraudulent information to DVA in relation to their education allowance (on which the Income Support Bonus is paid) such as eligibility status or change of circumstances, DVA would recover the payment.

Income Support Bonus paid by DVA will not be used to recover other debts the client may have outstanding with DVA or DHS.

13.6.5.5 Legislative References

DHS clients’ social security legislation was amended by the:

• Social Security and Other Legislation Amendment (Income Support Bonus) Act 2013.

Similar amendments were made to the MRCAETS and the VCES via the:

• Veterans’ Entitlements (Veterans’ Children Education Scheme – Income Support Bonus) Instrument 2013; and the
• Military Rehabilitation and Compensation Act Education and Training Scheme (Income Support Bonus) Determination 2013.

The DHS Income Support Bonus ceased December 2016; with the last payment being September 2016.  The authority for this was from the:

• Minerals Resources Rent Tax Repeal and Other Measures Act 2014

which received Royal Assent 5 September 2014.