Scholarship affecting Centrelink Payments

[KatherineGale]

Hey guys,

I've just been told by centrelink that having a scholarship could reduce my centrelink payments. Does anyone have any experience with this? How much does it affect it?

I'm a bit concerned because if they will just reduce my payments, what's really the point of having a scholarship? I wouldn't be too concerned if I just got a smaller scholarship as if they reduced my payments it probably wouldn't be by much, but I got a fairly generous scholarship, so I'm at a bit of a loss of what to do. I won't find out how it will affect my payments until I start studying and my payments get switched over.

[Professor Polonsky]

Hi Katherine,

I would confirm again with Centrelink that the scholarship will in fact be counted as income. This page suggests that it may be excluded.

Even if it is counted as income, you will most likely be better-off receiving the scholarship. This will depend on the payment that you are on, but generally where income reduces a payment, it only partially offsets it. For instance, with Youth Allowance, for each $1 of additional income you may only lose 60 cents of your payment.

This is obviously just general, high-level information because this would obviously depend on your particular circumstances. It should usually, however, be possible for you to figure out yourself what the effect of receiving the scholarship would be.

[jamonwindeyer]

Hi Katherine! Just jumping in with some personal experience - I was receiving Youth Allowance in my first year of university and also receiving scholarship payments. My understanding is that because the scholarship was merit based, it didn't count towards my taxable income. So assuming your scholarship is merit based you should be okay! But I agree with above, definitely confirm with Centrelink/the uni, and it would almost certainly still be better for you to receive the scholarship than not receive it either way

[KatherineGale]

I would confirm again with Centrelink that the scholarship will in fact be counted as income. This page suggests that it may be excluded.

Even if it is counted as income, you will most likely be better-off receiving the scholarship. This will depend on the payment that you are on, but generally where income reduces a payment, it only partially offsets it. For instance, with Youth Allowance, for each $1 of additional income you may only lose 60 cents of your payment.

Thanks Professor Polonsky! I had a look at the link and it clarified a lot. I'm still not sure if my scholarship would be exempt - I hope it would come under equity.

My understanding is that because the scholarship was merit based, it didn't count towards my taxable income. So assuming your scholarship is merit based you should be okay! But I agree with above, definitely confirm with Centrelink/the uni, and it would almost certainly still be better for you to receive the scholarship than not receive it either way

Thanks jamonwindeyer!

My scholarship wasn't merit based. It was a combination of personal problems, medical problems, and (which I find quite funny considering it may mean nothing) financial problems

I will double check with Centrelink and I agree that I should still keep the scholarship, it will just get a bit complicated with Centrelink (and I've had my fair share of complicated with them haha).

Fingers crossed when my payments are switched over they will let me keep it without cutting my pay.

Thanks for all your help guys. Really appreciate it!

[Professor Polonsky]

Thanks Professor Polonsky! I had a look at the link and it clarified a lot. I'm still not sure if my scholarship would be exempt - I hope it would come under equity.

My scholarship wasn't merit based. It was a combination of personal problems, medical problems, and (which I find quite funny considering it may mean nothing) financial problems

I will double check with Centrelink and I agree that I should still keep the scholarship, it will just get a bit complicated with Centrelink (and I've had my fair share of complicated with them haha).

To me it sounds that Centrelink should consider it as an equity scholarship and therefore not count it as income, as it's intended "to enable the student to study or undertake research at an educational institution." (That wording is from the Social Security Guide, which is what Centrelink uses for its decision making.)

Good luck with it, I hope it all works out well!