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Higher Education Grants.

Dáil Éireann Debate, Thursday - 26 April 2007

Thursday, 26 April 2007

Ceisteanna (196)

Jan O'Sullivan

Ceist:

197 Ms O’Sullivan asked the Minister for Education and Science if SSIA account interest will be taken into account in deciding higher education grant qualification for the 2007 to 2008 academic year; and if she will make a statement on the matter. [15737/07]

Amharc ar fhreagra

Freagraí scríofa

In relation to SSIA income, I want to assure the Deputy that the Government is determined to ensure that SSIA savers are treated fairly in the calculation of reckonable income under my Department's maintenance grant schemes.

This is being achieved in two ways: firstly, income from SSIAs is being treated exactly the same as income from similar savings and investment products; and secondly, the reckonable income limits for student grants have been increased considerably in recent years.

Since SSIAs were introduced, the amount of income to be included in respect of them is the government grant earned on the savings in the relevant tax year plus, in the case of savings accounts, the gross interest earned in the relevant tax year, and, in the case of investment accounts, the investment profit earned in the relevant tax year. Investment losses sustained in the relevant tax year are deductible.

The same position has long applied to interest earned on other savings products, including deposit accounts, post office savings certificates, life assurance bonds etc. The treatment of SSIAs is therefore consistent with the traditional treatment of other similar investments over many years. The Department of Finance is aware of this approach to the assessment of income for eligibility for student support.

So, in applying for a grant for the 2007/08 academic year, only the relevant income earned, as outlined above, on the SSIA in 2006 has to be declared. The maximum that the Government grant to any SSIA saver could have amounted to last year, as in any year of the SSIA scheme, is €762. This has been the position since SSIAs were introduced.

In relation to the income limits which apply when a person's eligibility for a grant is being assessed, the Deputy will be pleased to know that these have increased significantly since SSIAs were introduced.

The 2003/04 academic year was the first year in which the full year SSIA income had to be included in applying for a grant, as the reference tax year for the purpose of grant assessment was 2002.

For the 2003/04 academic year, the income limit for a family with 4 children was increased from €23,770 to €35,165– an increase of nearly 48%.

The income limits have continued to rise each year, to the point where the limit for a family with 4 children this year is €41,055 – an increase of nearly 73% on the amount allowed in the 2002/03 academic year.

As these increases show, this Government has shown a clear determination to improve the grant system to ensure that students get as much support as possible.

But, not only have we increased the income limits significantly, we have also made other improvements to the grants system:

We have introduced two new income thresholds to allow for 25% and 75% grants as well as the 50% and 100% rates;

We have brought in a new ‘top-up grant' to target extra funding at those who need it most; and

We have increased grant payment rates.

Indeed, the maximum level of the ordinary maintenance grant available this year is €3,110 – compared to €2,390 in 2002.The maximum level of the Top Up Grant in 2006/07 is €5,970 — compared to €3,000 in 2001/02.

This year, over €228 million has been allocated for the third level student support schemes.

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