Adjournment Debate. - Higher Education Grants Scheme. – Dáil Éireann (27th Dáil) – Wednesday, 2 Mar 1994

Adjournment Debate. - Higher Education Grants Scheme.

Mr. Dukes

The recent report of the expert advisory group reviewing the third level grants scheme serves once again to highlight the anomalies and inequities in the assessment of farm incomes for the purposes of the scheme. These experts are proposing that the value of assets such as land should be taken into account in determining eligibility for such grants. We do not know how far they intend to go with this proposal or the other sectors where the value of assets might be taken into account. The Minister appeared to indicate earlier today that we will not find out because she refused to publish the report. This is a disquieting prospect because the proposal that the value of assets should be taken into account in determining eligibility for these meanstested grants is nonsense and can only cause further inequities.

The Minister of State knows as well as I do that the asset value of farm land is not income. In today's circumstances 50 acres of reasonable land could easily have an asset value of £150,000 or more. In a typical case, family income, if the farm is doing well, might be in the region of £10,000-£12,000. The asset value and income are disproportionate. In many cases, there are borrowings for productive purposes and land purchases with the land being used as security. In those cases, the effective asset value to the farmer is a great deal lower than the book value.

Will these experts propose that the assets used by other people should be taken into account? Will they propose that the assets used by industrial workers, by those involved in the financial sector such as bank managers, clerks or insurance companies, should be taken into account and, if not, what is the reason they have proposed that the value of assets owned by farmers should be taken into account?

This proposal has much more to do with the ideology of socialist begrudgery than with any concern for equity in expenditure. I am astonished that we have heard nothing from Fianna Fáil on this issue. I do not think that Fianna Fáil entered Government with the Labour Party to support this socialist begrudgery which has become a common feature of Government policy. When asked specifically about this report in the House earlier today, the Minister refused to publish it.

There are inequities in the existing scheme. When a farmer applies for a higher education grant for a member of the family and produces a statement of income which is accepted by the Revenue Commissioners for tax purposes further adjustments have to be made. In every case these are to the disadvantage of the son or daughter seeking a grant to attend a third level institution. For example, payments made for leased machinery and capital allowances are added and credited as farm income for the purposes of the higher education grants scheme.

It ignores the fact that to stay in business farmers must invest, that it is not discretionary and if a tractor is worn out it has to be replaced. However, if the farmer leases the tractor, the lease payment is added to his income and if he borrows money and pays interest on the loan the interest payment is added to his income and he will probably be disqualified from getting a grant.

Compensation for the temporary suspension of milk quota is treated as income for higher education grant purposes where it is treated as capital for income tax purposes, but everybody knows that compensation payments for the cessation of milk production are usually used to set up another enterprise on the farm. Farmers are not entitled to PAYE allowance and there is no allowance for the self-employed PRSI payments they make.

These and other factors mean that effective income thresholds are higher for farmers than for any other profession. To give an example, a married farmer with two children and a taxable income of £15,000 will not qualify for a grant under the scheme at the moment whereas, a married person in any other walk of life with the same taxable income will rightly and properly qualify for a grant. Does the Minister of State have proposals to end these inequities and particularly to deflect this latest piece of begrudging socialist nonsense that is about to be foisted on us?

Minister of State at the Department of Finance (Mr. N. Treacy)

I am happy to respond to the Deputy on this matter.

It affords me an opportunity to clarify the position and to reiterate the continuing commitment of the Minister for Education to facilitate wider access for all students to third level education and the continued improvement and reform of the third level student support schemes.

In the third level area, well over half of the total enrolment of 80,000 students in the 1992-93 academic year were in receipt of student support, in the form of higher education grants, vocational scholarships and ESF grants, compared with a quarter of all students in 1982-83. It is, therefore, essential that the moneys on third level student aid expended by the Exchequer are equally and fairly distributed.

The Minister is committed within the constraints of Exchequer resources to the elimination of inequities and anomalies from the third level student support schemes. In March 1993 the Minister established an expert advisory group on third level student support with the following terms of reference: (a) to recommend appropriate criteria for assessment of eligibility on grounds of means, with reference to equity and the financial capacity of parents and applicants to pay and (b) to examine and make recommendations for the most effective organisational arrangements for the administration of the scheme.

That group worked closely with, and drew on, the expertise of Departmental officials and received submissions from all interested parties.

The Minister received the group's report recently and obtained the agreement of Government for a number of major improvements to improve the administration of the third level student support schemes. As a result the Government has agreed already to implement the following improvements: the establishment of a central agency to process grant applications and payments, and thereby dramatically improve the service to the student; this will take effect for the 1995-96 academic year; the abolition of the separate attainments for eligibility for a grant; this will ensure that all students who have secured a college place will now qualify for a grant subject to meeting the means test; the introduction of new rules for second chance cases—this is to ensure students who did not complete their initial studies will be eligible to apply for grants for second chance courses after five years; the provision of a discretionary budget in 1994 to set up a hardship fund with third level institutions; an increase in the income limits in line with the average industrial wage and in maintenance grants in line with inflation.

The group would have looked at a wide range of additional issues involved in the determination of reckonable income for grant purposes including anomalies in the assessment of farm income to determine eligibility for higher education grants.

The Government is continuing its study of the other significant findings in the report. When the study is completed the Minister will publish the report and put forward a range of additional measures designed to: (i) address the concerns to which the Deputy alluded; (ii) ensure greater equity in the operation of the schemes; and (iii) continue the task of improving access to third level education. I agree with Deputy Dukes. I come from a rural constitutuency and represent many small farmers. Perhaps Deputy Dukes, on the other hand, represents many large farmers.

Dáil Éireann debate - Wednesday, 2 Mar 1994