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Friday 22 August 2014

Farmers and self-employed face clampdown over student grants

Fionnan Sheahan Political Editor

Published 04/02/2013 | 04:00

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FARMERS and self-employed business people face a five-year trawl through their accounts and assets in a clampdown on student grants, the Irish Independent has learned.

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The Government is planning to tighten up the rules on means testing to ensure clever accounting can't be used to "hide their assets".

Education Minister Ruairi Quinn's inclusion of farmland in means test changes comes despite vehement opposition from Fine Gael.

At the moment, the student grant is only assessed on the income of the parents in the year running up to when they apply for a college place and doesn't include assets owned.

For years, this has led to the perception of hard-pressed PAYE workers marginally failing to meet the income criteria and being refused the grant, while the children of many asset-rich businessmen and farmers get the full allowance.

But Mr Quinn plans to change the system to include a capital asset test, as he believes farmers and self-employed business people can manipulate their income to get grants.

Under the new system, assets such as farms, shops and businesses worth over €750,000 will be included in the means tests.

A value is then attributed to the amount of the asset above that value, which is then factored into the figures, similar to payments from the Department of Social Protection. Allowance is also given to mortgages and write-downs on loans.

The change is likely to result in a third of all farmers having the value of their land assessed for inclusion in applications.

Government sources said there is an awareness of the prospect of business people and farmers transferring assets in the year of the means test to ensure they get under the income threshold. To guard against this, asset transfers over the previous four to five years will also have to be declared.

Opposed

"They won't be able to hide their assets. Some of it (the asset transfers) would be perfectly legitimate. But there has always been evidence (that) you finesse your accounts the year before, so you don't go over the limit," a government source said.

Officials will be watching out for "at-risk cases", where there is a suspicion it is being done deliberately for the means test.

Although the changes should only hit big farmers, Fine Gael TDs and farmers' representative bodies, such as the IFA and ICMSA, are staunchly opposed to inclusion of farmland.

Last year, Agriculture Minister Simon Coveney joined Fine Gael backbenchers in expressing fierce opposition to the prospect of farmland and business premises being included for the first time in the means test for student grants.

However, the inclusion of assets in means testing was included in Budget 2013, so the change is coming.

Last night, the Department of Education said the Cabinet is due to discuss the issue of broadening the means testing arrangements for grants to include the value of capital assets in the near future.

"Fundamentally, this is about ensuring that at a time of reduced resources, the Government targets schemes such as the student grant system at those who need them most.

"The broadening of means testing is not aimed at a particular section of the community, but rather at ensuring all students are treated equally in the assessment of their or their family's means," a spokesman said.

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