Farm Ireland
Independent.ie

Sunday 17 December 2017

Time to debunk the myths about farmers and third level grants

Less than one in two farm families actually qualify for college grants.
Less than one in two farm families actually qualify for college grants.

Martin O'Sullivan

It is that time of year when Leaving Cert students have nominated their preferred third level course and the question of funding college attendance is being gingerly brought up at many a family breakfast table.

There is a general perception about that farmers' children are one of the main beneficiaries of third level education grants and that farmers can easily play the system to secure qualification for their son or daughter.

This is something of an urban myth, it is totally untrue and this is borne out by the fact that less than one in two farm families actually qualify for college grants.

Those who do qualify, do so because average family farm income as measured by the most recent National Farm Survey is €26,974 which falls well within the qualifying limit and not because the system is easily taken advantage of by farmers.

The restrictive manner in which farm income is assessed, coupled with the fact that over 50pc of farmers or their spouses have off farm income is largely the reason that so few farmers' sons or daughters actually qualify for college grants.

Inaccurate headlines such as that published in a prominent Sunday newspaper some time ago along the lines 'My Daddy bought a new combine harvester and I qualified for a college grant' are totally incorrect and do nothing to dispel the aforementioned urban myth.

The cost of third level education for those who are not in a position to commute is currently in the region of €14,000 for an academic year which is set out in the tables.

For those fortunate enough to qualify, the grant will cover close to half of the total cost and while many undoubtedly will qualify, all parents of intending students should check their eligibility particularly in light of the decline in farm incomes experienced by many in 2015.

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ASSESSMENT OF MEANS

In determining a farmer's income for the purpose of establishing their child's eligibility for third level grants, most input and overhead cost are allowed but certain expenses which are allowed for tax purposes are disallowed and certain income not chargeable to tax is included in determining eligibility.

The table sets out those sources of income that must be included despite the fact that they are income tax exempt. There may be some justification for including such sources of income but it is wholly unreasonable to disallow some of the tax allowable expenses as set out in the table.

For example, any form of asset replacement or investment in the farm is not allowed despite the fact that a farm simply could not survive without replacing its essential plant, equipment and buildings. Furthermore, averaging of farm profits is not allowed.

This is a mechanism that was introduced to take account of the very cyclical nature of farm incomes that generally does occur in any other sector.

Surely the same should apply for education grant determination as farmers children should not be deprived of the opportunity of a college education as a direct result of farm product price fluctuations.

The number of dependent children in the family will determine the various income thresholds. For each additional child attending a third level course of at least one year's duration the income limit is increased by €4,830.

STUDENT HOLIDAY EARNINGS

A student is allowed to earn up to €3,809 in the calendar year prior to application provided the work is outside of the course term time.

VALUE OF GRANTS

The amount of grant payable is set out in the tables. Where one qualifies for a maintenance grant they will also qualify for the Student Contribution charge which is currently €3,000.

TAX RELIEF ON STUDENT FEES

Tax relief at the standard 20pc rate is allowable in respect of the Student Contribution but only for the second and subsequent students. Undergraduate or post graduate course fees including the Student Contribution are tax allowable at the 20pc rate up to a maximum of €7,000 per year. There is no relief for examination fees, registration fees or administration fees or indeed the accommodation and maintenance costs of the student.

Indo Farming