For discussion FCR(95-96)125
on 9 February 1996
ITEM FOR FINANCE COMMITTEE
HEAD 173 - STUDENT FINANCIAL ASSISTANCE AGENCY
Subhead 275 Student travel scheme
Members are invited to approve supplementary provision of $22.8 million under Head 173 Subhead 275 for payment of student travel subsidy.
The approved provision for student travel subsidy is insufficient to meet the increased expenditure in 1995-96.
2. The Controller, Student Financial Assistance Agency (C, SFAA) proposes a supplementary provision of $22.8 million under Head 173 Subhead 275 in order that payment of student travel subsidy can be made to the eligible students in 1995-96.
3. On the basis of actual expenditure for the nine months from April to December 1995, C, SFAA estimates that the expenditure for the current year will exceed the approved provision by $22.8 million, as follows -
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$'000
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(a)Expenditure to 31 December 1995
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185,420
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(b)Estimated expenditure for the remainder of 1995-96
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29,609
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(c)Total estimated expenditure for 1995-96 [(a) + (b)]
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215,029
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(d)Approved provision for 1995-96
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192,229
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(e)Shortfall [(c) - (d)]
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22,800 |
4. The shortfall is mainly due to an increase in public transport fares. In preparing the 1995-96 draft Estimates, provision required to meet payments under the Student Travel Scheme was calculated on the basis of an estimated 181 633 successful applications. C, SFAA now estimates that the number of successful applications will be 176 972, a slight decrease of 2.6%. However, the average subsidy per successful application, which is calculated on the basis of the updated public transport fare matrix for the Student Travel Scheme, has increased by 13.1% from $1,058.3 to $1,196.9. This reflects the increase in public transport fares. Besides, there is a residual payment of $3,217,000 carried forward from 1994-95, which is mainly to cover appeal cases, late applications and applications with incomplete information that could not be completely processed in 1994-95.
5. Supplementary provision of $22.8 million, if approved, will be offset by deleting an equivalent amount under Head 106 Miscellaneous Services Subhead 251 Additional commitments.
6. Members approved the Student Travel Scheme on 14 July 1988. In the present form of the Scheme, travel subsidies are provided to needy full-time students between the age of 12 and 25 who have not yet completed their first degree and who live beyond walking distance from their places of study. The subsidy is calculated at the rate of half the average fare on public transport during term time between the district in which the student resides and the district in which the school is located.
7. A fare matrix covering all districts was established and updated annually by the Transport Department for the purpose of determining the subsidy required in each case. A means test was introduced under the Scheme with effect from the 1991-92 school year. Since then, eligibility for the subsidy is assessed on the basis of a points system which takes into account the applicants household income and the number of dependants in the family.
Education and Manpower Branch
January 1996
Last Updated on 2 December 1998
