Something has to give in Cabinet over college grants

Minister awaits a report on the vexed issue of taking capital assets, including farm assets, into grant calculations

OVER THE coming weeks, you can expect a cascade of statistics about students’ and farmers’ grants. All the main players in this classic rural-urban divide come armed with impressive statistics.

Broadly, the farmers’ organisations are doing the béal bocht; the poor farmers barely have the pingin rua – why shouldn’t their kids get the college grant?

For their part, the townies in the Labour Party are spinning tales of how farmers are reaping the benefits of a booming farm sector, driving their kids to college in the BMW and then asking their accountant to finesse their income so that Mary and Seán (not their real names) secure grants.

What’s the truth? This is precisely what a forthcoming report from an expert working party on capital assets is trying to establish. At least, that’s the official line from Minister for Education, Ruairí Quinn.

Officially, his department says no decision has been taken on the treatment of farm or other business assets. “Any proposals arising from the Capital Asset Test Implementation Group’s recommendations will require further Government agreement and will also necessitate legislative amendment. Any comment at this stage on possible recommendations is speculation.”

Despite these soothing words, farming organisations are right to be worried about possible changes in the workings of the student grant system – including new forms of means-testing and consideration of assets such as second homes.

Within weeks of taking office last year, Quinn accused some farmers of manipulating their income to ensure their children secured the grant – an option not available to PAYE workers.

This week, he was much less strident on the issue.

An official explains the starting point in this debate for Quinn. “This is not about being pro- or anti-farmer. This is about equality and fairness at the time when the public purse is under the most severe pressure.”

Reform of the student grant scheme has been on the education agenda for more than two decades, but successive ministers have ducked the issue. This is hardly surprising given the immense power of the farmers’ lobby.

Change has been demanded since the 1997 de Buitléir report concluded the current means test “is defective in that it fails to take full account of ability to pay – particularly since it ignores the accumulated wealth of individuals. Some people with clearly expensive lifestyles obtain grants while others, who are very hard-pressed, lose out.”

De Buitléir reported how one farmer had 122 acres and net assets of £215,000, but his annual income for grant purposes was only £15,000.

By contrast, the PAYE sector was treated harshly, as a disproportionate number of grants flowed to the self-employed and farmers, it concluded.

The new report will represent the definitive word on the workings of the grant scheme.

But this week, most of the public debate focused on statistics gleaned from the most recent figures – for 2010 – from the Higher Education Authority

These figures were effectively used by both sides to support their case. The farming organisations pointed out that those from a farming background make up only about 10 per cent of the total number of grantholders.

Labour Party supporters focused on how farmers and the self-employed are still more than twice as likely to get college grants for their children as PAYE workers; more than 40 per cent of all farmers and close to 50 per cent of self-employed people secure a college grant for their sons or daughters.

By contrast, only 17 per cent of those from families headed by “lower professional” – on PAYE – expect to be grant-aided in college.

All parties to the dispute are awaiting the report from the working group on capital assets, due next month.

The group – headed by a Department of Education assistant secretary – is made up of senior officials from the Department of Social Protection, the Valuation Office, the Revenue Commissioners and others. The Department of Agriculture is also represented after discussion between Minister for Agriculture Simon Coveney and Quinn earlier this year.

This week, Coveney signalled his opposition to any new forms of means-testing. While many farmers were asset-rich, their cashflow and income level was well below the national average, he maintained.

On the Labour side, party chairman Colm Keaveney and others are pushing for real change and an end to what one Labour TD calls the “scandalous abuse” of the student grant scheme.

There is a sense that something has to give on the issue in Cabinet over the winter months.