Kieran Coughlan: Act early if you are interested in college grants this year
The deadline for new applicants is August 1, 2015.
If you, your child or your spouse have enrolled or intend on enrolling for an approved third level course for the 2015/2016 academic year, it is worth checking if a grant from SUSI is available.
Many would-be third level students mistakenly delay applying for a grant until after their Leaving Cert points are issued, or after the student has accepted a course offering from the CAO, usually around mid-August — at which point the application is late, and the applicant risks delayed processing at best.
For a student to benefit from a grant, the typical process involves the examination of the income of both the student and their parents — a means test.
The relevant income limits and grant rates that apply to the majority of third level students remain unchanged from 2014 levels.
The income thresholds are increased incrementally in the case of families with more than four dependent children.
Where a student is under 23, the student and their parent’s income is aggregated to determine if their total income exceeds the relevant thresholds.
There are very limited exceptions to these rules.
The means test is applied solely on the would-be students’ income, if they are a mature student, over 23, and have not been residing with parents or guardians prior to first entering or re-entering their chosen college course.
For this academic year, students must submit details of income arising in 2014.
As part of the SUSI application process, for children of farmers, full accounts and a notice of assessment (issued by Revenue) must be submitted.
On a practical basis, this means that forwarding 2014 books and records to your accountant should now be an immediate priority, to allow sufficient time to evaluate the relevant income for 2014, but also to prepare and submit the accounts to Revenue, in order that the Notice of Assessment can be obtained in good time.
Income from all sources within the calendar year 2014 is totalled, including gross employment income before any tax deductions are taken into account, self-employed income, rental income, deposit interest and social welfare income.
It’s worth noting a number of specific points in relation to farm income, when it comes to this grant scheme.
Farm income is calculated as being the profit as per the farm accounts, however no deduction is allowed in respect of depreciation, or capital allowances (the write-off of expenditure for investment in farm assets).
Neither is there any allowance given for interest on borrowings used to buy assets, or for leasing of equipment in a finance lease arrangement.
Furthermore, no deduction is allowed in the case of wages paid to dependent children or casual labour.
Farm income is assessed in respect of the accounts ending within year 2014 only, even in cases where a farmer has elected to be assessed for tax purposes using income averaging.
In exceptional cases, SUSI will allow an applicant use revised income figures where there has been a change of circumstances, such as the loss of employment income, however SUSI suggests that variability of income is within the nature of self-employment, farming and rental income, and a reduction in such income is not considered to be a permanent change, meaning that any drop in income in 2015 (for example, in the case of dairy farmers) will not be taken into consideration as a valid change in circumstances.
By caveat, SUSI will consider cases where an applicant or their parents ceased trading either within or after 2014.
Even if you don’t qualify for a grant, all is not lost, it may be possible for the payer of college fees to claim tax relief on college fees in some circumstances, in particular where parents are paying the student contribution or college fees for more than one child, within the same academic year.
From a tax efficiency point of view, it is therefore worth considering whether parents should be paying the contribution directly to the relevant academic institute, rather than gifting the amount to their child to enable them to pay the contribution.
Alternatively, farming families should consider whether payment to a child can be considered as tax deductible wages in the case of genuine employment, of course such employments need to be properly accounted for (wages, taxes, and tax filing with Revenue).
For Leaving Certificate students who may be unsure whether they will be attending college for 2015/2016, or where you are unsure whether you will qualify for a grant, the best advice would be to apply to SUSI prior to the deadline of August 1, 2015, to ensure your application will be processed.
Full details are available at the www.susi.ie website.
