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Blog:

Student Allowance in a Nutshell

16 December 2019

The rush towards the end of the year is on and soon we will be reflecting on achievements for 2019.  For many of our families and offspring it is time to plan for the new academic year.  Studying can be a stressful time for youngsters trying to make their way in life and having access to a Student Allowance may help ease the burden. 

There are fees free options for study as well as apprenticeship-based training, however, most students studying at a tertiary institution would be charged fees.  A Student Allowance is a contribution towards study costs such as books and accommodation that does not require repayment.  You can also apply for a student loan, which will require repayment at a later stage once you reach a certain income threshold.   

If you are a NZ resident, between the ages of 18-65, study full time and are studying an approved course, you may be eligible for a Student Allowance as long as you meet the criteria for that study. 

Applications for Student Allowance are through StudyLink and the application process can be complex.  It is wise to prepare this application early and have it processed before your study commences.

Broadly speaking, if a child is dependent on their parents for financial support the application will be based on parental income.  It is means tested with the threshold earning maximum $97,040 if the child lives at home or $104,631 if they live away from home (for the 2020 year).

As the start of the tertiary year is midway through a financial year there is the option to calculate eligibility using either the actual financial results from the most recent set of annual accounts or the estimated income of the current financial year based on realistic budgets.  This is a good option to look at if you know there may be a major change in your income for the current year.

Parental income is based on the family scheme definition of income and that includes all income available to the family to cover daily living costs.  So, as well as the taxable income in your tax returns, the most common other types of income that also need considering are:

  • Income left in a Trust (not distributed to beneficiaries)
  • Income from a closely held Company (not allocated as a salary)
  • Income equalisation deposits
  • Any losses offset against current years income
  • Any payments that are used for day to day living costs

There are also other types of income (less common) that may need to be considered, so if you think your child may be eligible, contact the team at BDO Taranaki today to ensure you get it right.


BDO Taranaki specialises in rural business advisory services and has a team of rural experts. Learn more about BDO Taranaki’s Agribusiness services and read other articles relating to the financial issues that affect New Zealand farmers.  ​