Starting next year, the Family Assets Test and the Family Actual Means Test will be removed from the Youth Allowance parental means test arrangements.

The welfare support changes were announced in this year’s federal budget and associated legislation passed through federal parliament last week with bipartisan support.

The Family Assets Test is based on how much money a family would receive from selling their primary assets, minus any debts or mortgages they owe.

Currently, the family home is excluded from that Test while a 75 per cent discount is applied to business and farm assets.

Applicants are ineligible for the $426.80 maximum fortnightly Youth Allowance payment if their family's assets exceed a $661,250 threshold.

But NT Senator and Nationals Senate leader Nigel Scullion said the legislative changes that passed last week would mean farming families no longer have farm assets counted towards the means test for their dependent children claiming Youth Allowance.

“With a financial commitment from the government of $262.7 million over the forward estimates, this Bill will bring extra support to families as their children move into young adulthood, particularly rural and regional families whose children continue to study beyond Year 12,” he said.

Senator Scullion said removing the Family Assets Test for Youth Allowance would allow around 4100 additional dependent Youth Allowance claimants to qualify for the first time, accessing average annual payments of more than $7000 a year.

He said removing the Family Actual Means Test would see around 1200 more people receiving Youth Allowance for the first time while increasing payments for around 4860 existing students by approximately $2000 a year.

Senator Scullion said the new measures were adopted following an Inter-departmental Committee’s examination of issues regarding access to higher education for regional and remote students at the urging of Senator McKenzie and other backbenchers.

Senator McKenzie said for decades, farming families had experienced the unfairness of having their farm counted as an asset in Youth Allowance assessment.

But she said the changes prompted by the new legislative changes would allow farming families to better support their children, to further study.

“This is great news for rural and regional Australians who are faced with higher costs when their children are studying or training because they have to move away from home,” she said.

“These changes are particularly timely; given many young people are sitting exams and deciding preferences over coming weeks.

“It is envisioned that this will be a positive outcome for 1200 families in assisting them to overcome the financial barriers in attending university.”

Social Services Minister Christian Porter said over 33,000 Australian families would be better off after the legislation passed federal parliament last week to provide more generous youth payment means testing measures.

“Regional and rural families often face higher costs when their children are studying or training because they have to move away from home,” he said.

“These changes mean those families will no longer have their farm assets counted toward the means test.”