FG revolt ends Quinn reforms of means test for grants
EDUCATION Minister Ruairi Quinn has been forced to shelve plans to change the student grants means test due to a Fine Gael backbench revolt.
The controversial plans would have seen parents' assets being considered when assessing who is eligible for a grant – a move which would have badly hit farmers and business owners.
There had been fears that the changes would lead to thousands of students from low-income farming and business families missing out on grants.
It is a boost for students from such families who are beginning the Leaving Cert today.
Mr Quinn's department has confirmed that no change will be made to the means test for students entering college this September.
Although changes to the grants system next year have not been ruled out, Fine Gael backbenchers are predicting that the plan is dead.
The number of students getting grants has soared to a record 76,000 due to the impact of the recession on their parents' incomes. It means that the State is paying grants to almost half of all students at a cost of €336m.
Mr Quinn had stated that his aim was to have the new means test introduced by September so that he could target “increasingly scarce resources to those who need them most”.
But he faced strong opposition from Agriculture Minister Simon Coveney and Fine Gael backbenchers. They warned that some farmers and business owners were “asset-rich but cash-poor” – and that their children might not be able to afford to go to college without a grant.
Mr Quinn would also have had to get cabinet agreement and then draft legislation – at a time when the Government is focusing on getting the abortion legislation passed before the summer break.
A spokeswoman for Mr Quinn confirmed there were “no changes” in the means test for student grants for the 2013/2014 period.
And she was unable to say if such changes would be implemented in future years.
“Decisions regarding a capital assets test, including when it should be introduced, are a matter for a collective decision by Cabinet,” she said.
Fine Gael Cork North West TD Michael Creed said the shelving of the changes for this year was a recognition by Mr Quinn that there had to be equity in the grants system.
“Basically, it's about income. This year more than ever, farmers have assets that have a value but they have incomes that have plummeted. This is something that would have been the last straw for them,” he said.
The current means test is based only on the income of a student’s parents in the previous tax year. That includes their gross salaries, rent from Irish properties, income from foreign properties, bank interest, and dividend payments.
Each standard grant is worth €3,025 a year and the student contribution fee of €2,250 is also paid by the State.
Mayo Fine Gael TD John O'Mahony said he would be continuing to campaign to make sure that any plans to include productive assets in the means test were “cast into the bin”.
“It comes at a good time for students because they have enough trauma to deal with over the next few weeks with the Leaving Certificate. It's one issue they won't have to worry about,” he said.
The decision was also welcomed by Fine Gael senator Michael D'Arcy, who said it had brought certainty for students.
“Some of us had a better awareness of how unfair this was than Minister Quinn and I think eventually the minister was able to see sense,” he said.
Mr Quinn had complained in the past that farmers and the self-employed were able to “manipulate their income” to get student grants for their children.
However, a source with knowledge of the current student grant process said this was a “myth”.
He said that several farmers who had posted legitimate losses of €10,000 in their accounts last year did not get grants for their children – because they were not allowed to include the cost of repayments for capital assets such as tractors and farm buildings.
Just 3.5pc of students who got grants last year listed farming as their parents' primary occupation. Even in families where farming is the secondary income are counted, it is estimated that under 7pc of students in total are from a farming background. No figures are available for the number of students from other self-employed backgrounds.
Mr Quinn's working group – which sent him a draft report several months ago – had also been looking at including other assets such as large savings accounts and second homes in the means test. This was far less politically controversial.