Home | Industry & Research | Taxing part-time postgrad study: “Strange, punitive measure”

Taxing part-time postgrad study: “Strange, punitive measure”

Higher Degree by Research (HDR) students, that is PhD or master's students, who undertake part-time study instead of full-time face harsher measures, one PhD student told Campus Review.

Australian Research Training Program (RTP) stipends are awarded to universities by the federal government to pay for HDR students' research and living costs.

Stipend amounts are updated each year – this year's is $32,192, about $11,000 below the national minimum wage. This amount is halved for part-time students, and is taxed, unlike the full-time stipend, which is tax-free.

A petition has been started to raise the full-time stipend amount to be in line with the minimum wage, among other requests.

Universities can choose to pay stipends higher than the minimum rate (although a maximum for the full-time stipend was introduced in 2017) and can offer a scholarship for between three and four years.

Historical PhD stipend rates compared to average full-time earnings and the national minimum wage salaries. A maximum stipend was introduced in 2017. Sources: ABS, OECDANU

Janet Davey, a Chinese Linguistics PhD student at the Australian National University (ANU), began her PhD studies in 2021, and changed to part-time at the end of last year for health reasons, which she said felt like a "heavy penalty."

"The things like health discounts, transport tickets, [and other benefits,] you immediately lose all of that," she said.

"And, of course, now it's taxable income instead of tax free. So, in reality, you only see about half of what the amount is per fortnight actually coming into a bank account."

Like many researchers, she also had to relocate to the city where her university is located – Canberra – to study. When she arrived she realised that rent was so high, it would be more cost-effective for her to purchase a place and pay off a mortgage.

Ms Davey said even though she had a scholarship ready, it was difficult to find a bank that would consider awarding her a loan because they don't consider scholarships as "real income."

"I was quite limited in the options that I had, and it didn't feel like I could make a competitive choice in what bank I went with," she said.

"I did manage to secure one, and it was really only because I had both the scholarship and a part-time job at that time.

"If I hadn't had real employment at the same time as a PhD, then it would've been a definite no.

"I'm very fortunate that I was able to do that, because as soon as I went from renting to paying a mortgage, my costs went down about half."

Most institutions also state part-time scholarships will only be allowed to researchers under specific provisions, and if that researcher can work outside their study time would also be decided by the university.

The Department of Education says students should "check the university's RTP Scholarship policies and seek approval from the university before commencing work outside of the RTP."

Ms Davey said the whole system is "disconnected from reality" as she is not allowed to work over 20 hours at her part-time job.

"People go part-time because they have other things going on in their life, whether it's that's life, whether it's caring responsibilities or work or health conditions that they're managing," she said.

"I feel like it's punishing me for recognising that I won't devote full-time hours to my PhD, and also work on top of that, instead and having a more balanced life between study and work.

"It just feels like a very unfair penalty. A strange, punitive kind of measure."

Many full-time postgraduate students have to work on top of their 38-hour study weeks because the stipend is too low for people who live out of home, or have other high expenses.

The Universities Accord says all RTP stipends should be raised, and the part-time stipend should be made tax-free.

"From an equity perspective, HDR students from under-represented backgrounds are relatively over-represented in part-time studies and yet the relative value of their support is reduced by taxation," the final report states."

"This tax treatment affects parents, particularly women. It also disincentives students currently working in industry who are looking to undertake research training without leaving their positions – an arrangement we ought to be encouraging as a nation."

The implementation of the Accord has been criticised for a lack of action in improving both the research and development and relationships with industry spaces.

Higher education policy and funding expert Andrew Norton explained why he thinks the tax system is in place.

"Part-time students are assumed to have capacity to work, and the ATO wants a share of that," he said.

"If that researcher is not working, they are likely to have total income below or only just above the tax free threshold, so their tax would be zero or near zero in any case."

Universities have recognised the minimum amount is too low, and in most cases pay full-time rates above the base rate. The sector average for full-time stipend amounts in 2024 was $34,244 for 3.3 years.

Full time stipend base rate averages by network. Source: ACGR

"The 2017 change was designed to give universities more flexibility in how much they paid their stipend holders between a base rate and a maximum rate," he said.

"This recognised that the base rate was too low to attract some students."

Mr Norton said if postgraduate students were paid more, universities would likely offer fewer scholarships, something the formerly mentioned petition explicitly outlined they don't want happening.

"However, there is a trade-off for universities as they have to use their RTP funds to both the support the academic work of the students, and to pay the stipends," he explained.

"This means that the more a university pays in stipends, the fewer students it will be able to have overall."

Ms Davey said she would like to see the stipend raised, part-time work restrictions softened, and an easier process for postgraduate students to share their research to better serve society.

The comments of the students and academics in this story do not directly refer to, or reflect the opinions of, the universities they study at.

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One comment

  1. Taxing HDR students is certainly not good case for calling ourselves the Smart Country, while impeding what makes us smart, scientific research! There is more taxable income to be generated by successful academics later in their careers than from their meagre stipends while they study, increasing their chances of failure due to financial stress while also trying to have a family. If this is not a good example for killing the goose that lays the golden eggs, I don’t know what is!

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