[Archive] Review of the various student travel subsidy schemes

Date of sitting: 13 November 2002

Asked by: Hon LAU Kong-wah

Replied by: SEM

Question:

Regarding the various student travel subsidy schemes, will the Government inform this Council whether:

1. in view of the current economic downturn, it plans to review the eligibility and computation formulae for various travel subsidies; if not, of the reasons for that;
   
   
2. it has reviewed the effectiveness of the various travel subsidy schemes in alleviating the financial burden on parents; if so, of the details; and
   
   
3. it will consider reviving the pre-1988 Student Travel Scheme which required no means tests, so as to replace the existing Student Travel Subsidy Scheme for primary and secondary school students; if not, of the reasons for that?
   
   

Reply:

Madam President:

1. Allowances are provided under the Travel Subsidy Schemes to needy full time students who pass a means test, live beyond 10 minutes' walking distance from their schools and have not completed their first degree and in the case of primary students, aged below 12, attending public sector schools outside their residing Primary One Admission Net. Successful applicants receive, depending on their means, a full rate or half rate subsidy for home-school travel during the school term. The full rate subsidy is set at a level equivalent to the full average fare and, in the case of the Mass Transit Railway, the concessionary fare.
   
   From the 2002/03 school year, we have improved the means-test to ensure consistency in the assessment of eligibility for all student financial assistance schemes and the level of assistance to which eligible students may be entitled. These improvements were approved by Finance Committee on 7 December 2001 [FCR(2001-02)43]. We envisage that these measures will benefit more needy students to obtain full rate or half rate subsidy which they may otherwise not be entitled. For example, a 4-member family with two children attending junior secondary schools located beyond 10 minutes' walking distance from their residence and earning not more than $8,500 per month would become eligible for full rate instead of half rate subsidy in 2002/03. The same family earning not more than $22,700 per month would now obtain half rate subsidy instead of receiving no assistance. We consider that the income and other criteria covering the Travel Subsidy Schemes to be reasonable.
   
   As regards the manner in which the travel allowance is determined, we use an average fare as the basis for providing the amount of the allowance as it is not practicable to determine the actual fares for each eligible student, whose mode of travel depends on the type and choice of transport available and the traffic conditions. We consider that the use of the average fare concept in the calculation of the allowance is appropriate and cost-effective.
   
   
2. The Student Travel Subsidy Scheme was last reviewed in 2000. As a result of this review, we uplifted the allowance payable to the neediest students from half rate to full rate subsidy with effect from the 2000/01 school year. This measure has relieved some 42 400 students in 2000/01 and 48 000 students in 2001/02 from having to meet the cost of their fares. The amounts disbursed for full rate allowances in 2000/01 and 2001/02 were $124.3 million and $140.4 million respectively or an average of about $2,930 per student for both years. As regards other eligible students receiving half rate allowances, we expect such students who are less financially disadvantaged to meet the cost of part of their school travel expenses. Some 154 900 students in 2000/01 and 157 300 students in 2001/02 were assisted in meeting half the cost of their fares. On average they were provided with $1,482 in travel allowances in 2000/01 and $1,501 in 2001/02. The total amount disbursed on half rate allowances for both these years was $229.5 million and $236.1 million respectively.
   
   As regards the Cross-net Travel Subsidy Scheme for primary students aged below 12, all eligible students are assisted to meet the cost of their concessionary half fares charged by public transport operators for children under the age of 12. In 2000/01 and 2001/02, the scheme disbursed $31 million and $37.9 million to some 23 800 and 28 800 students respectively. The average travel allowance paid was $1,300 in 2000/01 and $1,316 in 2001/02.
   
   
3. We have no plans to reinstate the former Student Travel Allowance Scheme (STAS). The STAS provided half rate travel allowances to students irrespective of their financial need. We do not consider that such an arrangement to be an appropriate use of public funds. Students of families who have the financial means should not rely on public funds to bear part of the cost of their school-related travel. The Government's policy is to ensure that no eligible student is denied education because of lack of means. Accordingly, the existing travel subsidy schemes are need-based. Students who meet the means-test and other criteria are assisted with their travel expenses to and from school through the provision of either full rate or half-rate allowances, depending on their means.