Minister for Education under fire over plan to include value of capital assets in means-testing procedure
Re-examining the third-level grants scheme and weeding out loopholes for high earners has been a priority for Minister for Education and Skills Ruairí Quinn since beginning his most recent tenure in the department.
For some time now, the suggestion that children of business owners with assets of more than €750,000 would not qualify for third-level education maintenance grants has been on the table.
The asset figure is large enough not to warrant much opposition from most circles. However, it also applies to farm value and, more specifically, a calculation – the origins of which are disputed – that a farm worth €750,000 is likely to generate an annual income of just over €41,000.
The Department of Education says this figure came from Teagasc, but director Prof Gerry Boyle described this calculation as “meaningless” and denies his organisation had any part to play in providing it.
While not commenting either way on the specifics of the calculation, a spokesperson from the Department of Education did tell The Irish Times that the Cabinet is planning to discuss the issue of widening the means testing arrangements for student grants to include the “value of capital assets” shortly, and that the issue would be decided collectively.
‘Reduced resources’
“We cannot comment on the details of this proposal before it goes to Government,” the spokesperson said. “However, it is important to note that a decision to include the value of capital assets in the means testing for student grants was included in the details of Budget 2012.
“The memo which Quinn is bringing to Cabinet follows on from a report from an interdepartmental working group set up to examine the issue.
“Fundamentally, this is about ensuring that at a time of reduced resources, the Government targets valuable schemes such as the student grant system at those who need them most. Equally, those who can afford to pay to go to third level should do so.
“The broadening of means-testing for grants is not aimed at a particular section of the community but rather at ensuring that all students are treated equally in the assessment of their or their familys means.”
Despite this, there is plenty of opposition and a sense that farmers are being unfairly treated. IFA deputy president Eddie Downey says “€750,000 sounds like a lot of land, but depending on the part of the country you are in, it could be no more than 40 acres.
“The average value of farmland in Ireland is €10,000 per acre. There are huge discrepancies in this proposal. Means testing would need to be based on fairer figures. The system in place already discriminates against farm families. It should be based on taxable income and nothing else.
“There might be plenty of farm families with assets of a high value but they’re not making more than €40,000 per year. In actual fact, a lot of families wouldn’t be earning anywhere near that.
“So I would ask publicly where the department got their figures from. They claim theyre from Teagasc, but Teagasc is saying otherwise.”
The 2011 Teagasc National Farm Survey showed that average family farm income in that year was approximately €24,461, the highest it had been for some time. However, farm-related income is known to fluctuate year on year depending on various circumstances.
Restrictions on grants
The president of Irish Creamery Milk Suppliers Association (ICMSA), John Comer, has stated that his association will contact every TD within the week “registering farmers’ rejection of the fundamental iniquity at the heart of Minister Quinn’s proposed changes to the system of third-level grants”.
Comer stated that a farm was, as he put it “nothing more than the tool by which a farmer earned his income”.
“A farmer working a 75-acre farm every day could barely make the average industrial wage and indeed, as was the case as recently as 2009, might work all year for absolutely nothing,” he says. “In 2009 you could have farmed 500 acres and still have ended up with no net income at all.”
Those working in third-level education do not see the logic of the proposed means testing changes either.
“Personally and from my students perspective, it seems like a ludicrous proposal, explains Dr Tony Woodcock, agricultural course leader at the Department of Chemical Life Sciences, Waterford Institute of Technology (WIT).
“I can’t understand it. Agriculture is a different animal to other industries. There’s no real link between the value of an asset and the income accrued from it. The value of land in these calculations is overly inflated related to how much money you could actually earn from it in a year.”
Woodcock believes more restrictions on grants in this area is counter productive, given that the government are promoting Food Harvest 2020 – an initiative to endorse and prioritise agri-food and fisheries in Ireland over the next decade – on the one hand, and proposing cuts to grants which would directly affect uptake of agricultural college courses on the other.
“If the Government are serious about Food Harvest 2020, they need to bring as many young, trained, vibrant people into agriculture,” he says. “The age profile of farmers is very worrying. So many are over the age of 65, and there are very few under 35 coming up.”
