Student allowance crackdown proposed

The Government wants a better way to check if people are eligible for a student allowance. New Zealand Herald Photograph by Richard Robinson.

University students who lie about how much their parents earn to secure a student allowance will be targeted under a proposed new information sharing agreement.

The Government has released a proposal to extend the information that the Ministry of Social Development can receive from Inland Revenue.

This would include the sharing of information to verify a student's and their parents' income in order to assess whether they qualify for a student allowance.

For people aged under 24, getting a weekly student allowance depends on their parents' income. If their joint earnings before tax are more than $55,000 a year, the student allowance rate goes down.

No student allowance will be paid for people whose parents jointly earn more than $84,000 a year.

Student allowance rates vary. For a single person aged under 24 who lives away from their parents, the rate is $175 after tax.

Allowing Study Link to receive earnings information direct from Inland Revenue would catch out more people who were incorrectly claiming an allowance.

"Through the proposed information sharing agreement, individuals who are wrongly claiming allowances are more likely to be identified," a spokeswoman for Revenue Minister Michael Woodhouse said.

The agreement will provide the ability for MSD to verify information provided by both the student and the parent, against information held by Inland Revenue.

Currently students have to provide evidence of income such as a letter or contract from an employer, payslips or a declaration in writing from parents of their estimated weekly income from self-employment.

Another aspect of the information sharing proposal is to allow MSD to work out who qualifies for social housing support through Inland Revenue information, rather than having to talk to employers as is currently the case.

Submissions on a discussion document covering the changes close on December 16.