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Opinion: Elizabeth Davies sees parents raising children on a diet of white collar crime, where it’s 'only illegal if you get caught'

Posted in Personal Finance

By Elizabeth Davies

Studylink is a dirty word, ask any student.

Everyone needs it, everyone hates it, but go without it for a week and you will sure as hell feel its absence.

It’s like a hard drug addiction, you don’t want to depend on it but you can’t help it, you just can’t function without it.

Studylink is the service that provides student loans, living cost loans and student allowances.

Notoriously disorganised, slow, rude and frustrating – Studylink is an ugly piece of furniture in almost every student’s life.

I’ve never qualified for the student allowance, my parents earn too much. The system is designed to give a helping hand to those whose parents can’t afford to assist them throughout their undergraduate degrees.

It’s a system that I have nothing but respect for, but a system I’ve watched people blatantly exploit for the last six years.

I’ve watched wealthy self-employed parents lie about their incomes to secure their children ‘free money’. I’ve even seen parents sign forms claiming they have no contact with their children, helping them secure allowances they are not financially entitled to.

I watched a member of my extended family take part in this and didn’t bother to bite my tongue. I loudly voiced my anger.

As I worked three shifts a week at a minimum wage job and racked up thousands in debt, my taxes paid for him to have the luxury of not working so he could focus solely on his studies and not have the burden of financial stress.

But it’s not just about me being bitter, it’s the harsh fact that money isn’t infinite, there’s only so much to go around. By lying about his financial status he wasn’t just stealing from me, and every taxpayer in the country, he was undermining everything the financial aid system was designed for.

If student allowance cases were properly investigated I’m sure it wouldn’t be hard to prevent cases like this, but investigations cost money which is needed elsewhere.

There’s no need to remind me how much student life costs and where those student allowances are being spent, no need to preach to the choir. The issue is that of honesty, or in this case lack-there-of.

It’s a case of parents raising their children on a diet of white collar crime, where it’s “only illegal if you get caught”, and no one gets caught.

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*Elizabeth Davies is a 23 year old post graduate journalism student at Auckland University of Technology. She lives with her partner in Epsom and spends her free time refurbishing vintage furniture and attempting to bake while fighting a daily battle against her bank balance. She writes a weekly article for interest.co.nz on money matters and financial struggles from a young person's perspective.

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9 Comments

They are just taking their

They are just taking their lead from the fine examples that our politicians continue to demonstrate. Hands caught in the cookie jar time after time.

That's what you get when a

That's what you get when a benefit is means tested.  Yes, means testing means you don't spend as much money overall, and you don't spend as much on people who don't need it.  It's arguably more progressive in that respect than a flat rate universal allowance. 
But it also creates resentment as people who've worked and saved feel they're being penalised, while those who haven't are rewarded; and that creates an incentive to cheat.  This in turn leads to expensive accountants, financial advisers, lawyers spending their expensive time dreaming up ways to avoid the means test.  And that requires ever more officials, and ever more Byzantine complexity of regulation, to monitor, enforce, close loopholes, intrude ever more closely into individual circumstances.
 
 

That's what you get when a

That's what you get when a benefit is means tested. 
 
I'm not sure that's a guarantee - your assumption appears to be people can only be selfish.

Well, that is probably a

Well, that is probably a safer working assumption than assuming that people can only be generous and honest!  For if they all were, we wouldn't be seeing the kinds of behaviour Elizabeth describes.  
 
However, to be precise.  Means testing provides people with a different set of incentives from a universal, flat rate benefit.   Usually, but not always, people will respond to an incentive in the way which they think will most benefit themselves.  The probability - not a certainty, for sure - is that more people will change their behaviour in response to a system which rewards some behaviours and punishes others, than will change their behaviour in response to a system which treats them the same whatever they do.  And that they are likely to change their behaviour in such a way as to maximise the rewards.
 
 

Sorry if that appears a bit

Sorry if that appears a bit pedantic but there are wider consequences if the bulk of people do exhibit selfish behaviour.

But of course they do, and so

But of course they do, and so they should.   Yes, of course policy and regulation should be developed on the assumption  that people will respond in the way that they think best serves their own interests.  If the result of people's self-serving response to a policy is socially undesirable, then the policy is badly designed.
 
If it is wrong for me to act in my own best interests, who should be acting in my best interests?  
 
If it is somebody other than me - then they are not as well qualified as I am to judge where my best interests are, and how does that help me or anybody else?
 
If it is nobody - I should not expect anybody to be concerned about ensuring my best interests, nor seek to pursue them myself - then whose interests are to be served? 
 
 

I wish I had the guts when I

I wish I had the guts when I was a student to request the $150 per week student loan payment. I would have shovelled it all into an interest bearing account and paid it all back earlier this year before the student loan bonus shut off.
 
Ah well, an opportunity missed.

Wholeheartedly agree. I

Wholeheartedly agree. I remember at university (late '90s, early '00s) even those from pretty needy families (struggling, certainly not wealthy) were ineligible. In fact most of those I knew who were getting the student allowance were from the highest echelons of the upper-crust.
I'm of the opinion that student allowances should be treated like scholarships, anyone can apply and more are allocated to vocational training we actually need, ergo it'd be easier to get a student allowance as an engineer, scientist, nurse, teacher etc than it would be for feminist studies, classical theorists and psychologists.

Yes nothing new here. I was

Yes nothing new here. I was at University when the loans first came in (early 90's). I had some "poor" friends who took the money and went on a holiday to Bali.