3.8.4.30 Determining the amount of the financial supplement
Note: No new financial supplement loans are available from 1 January 2004.
For existing loans, a person's loan repayment arrangements will continue unchanged. Remaining loans will be collected via the taxation system.
The following SFSS guideline references remain for historical purposes.
Maximum amounts - category 1
The maximum loan amount for a category 1 student (1.1.C.70) is the LESSER of the following 2 amounts:
- (total general rate of payment in the eligibility period minus advance payment minus overpayment) multiplied by 2, or
- (number of days in the eligibility period) multiplied by ($7,000 divided by the number of days in the year).
In making the first of these calculations, the only advance and overpayment deductions that are taken into account are those that would be recovered during the eligibility period.
Maximum amount - category 2
The maximum loan amount for a category 2 student (1.1.C.80) is calculated in the following way:
- (number of days in the eligibility period) multiplied by ($2,000 divided by the number of days in the year).
Annual limits
| Type of limit | Dollar amount |
|---|---|
| Maximum annual amount of general rate that can be traded in for a loan for a category 1 student. | $3,500 |
| Maximum annual amount of financial supplement loan for a category 1 student. | $7,000 |
| Maximum annual amount of financial supplement loan for a category 2 student. | $2,000 |
| Minimum annual amount of financial supplement loan for category 1 and category 2 students. | $500 |
Eligibility period
For various reasons the eligibility period may be less than the full calendar year.
Examples: Some example reasons are:
- late lodgement of the claim form
- a category 2 student turns 25 during the year
- a student is studying for less than a year, or
- transferring from other social security benefits.
Act reference: SSAct section 23(1)-'social security benefit'
Periods less than a calendar year
If a student is qualified for YA, Austudy or PES for less than a calendar year, the maximum amount of the loan is reduced proportionally, but the minimum amount remains fixed.
Example: A YA or Austudy student who commenced studying in the second semester.
Periods of both category 1 & category 2
If a student has periods of both category 1 and category 2 qualification, the maximum financial supplement offer is calculated for each of the periods.
Example: Paul is 18 years old and lives at home with his parents, and is going to commence a 3-year tertiary course in 2003. He applies for YA on 1 January 2003. His parental income for the 2001-02 base tax year is $50,000. On 10 March his parental income drops so that it will be $27,000 for the 2002-03 current tax year.
From 1 January to 9 March, Paul is ineligible for YA because of his parents' income. During this period he qualifies as a category 2 student for 68 days.
Because of the drop in his parents' income, from 10 March to 31 December, Paul is a category 1 student for 297 days entitled to receive $4,331.96 YA general rate.
His offer of $6,067 is calculated as follows:
- category 2 = ($2,000 divided by 365) multiplied by 68 = $372
Plus the lesser of
- category 1 = ($7,000 divided by 365) multiplied by 297 = $5,695 OR
- category 1 = 2 × $4331.96 = $8,663