A new ‘prac payment’ has just kicked in. But it ignores many uni students

On Tuesday, some Australian university students got access to a new payment. The Commonwealth Prac Payment is available to eligible teaching, nursing, midwifery and social work students.

It will provide A$331.65 a week during compulsory professional placements, to help with living and study expenses. This could include travel, accommodation, uniforms and lost income from other employment.

But while the payment is a much-needed step in the right direction, many students are still missing out.

Who’s not covered?

The prac payment was a recommendation from the federal government’s 2024 Universities Accord review. It is designed to help students complete essential professional placements, so they can graduate and enter the workforce.

But numerous other health degrees with time-consuming work placements are excluded from the payment.

This includes medicine, physiotherapy, dietetics, psychology, radiography and other allied health professions. Veterinary medicine students are also ineligible. Many of these professions are also experiencing serious workforce shortages.

The payment is also only available to teaching, nursing and social work students who already qualify for Ausstudy (the income support payment for students and apprentices who are 25 and over).

So this means the prac payment is means tested. It is also considered taxable income and paid at the rate of Austudy – which is not generous. The basic Austudy rate is below the national poverty line.

The payment is also only available to Australian domestic students, even though many international heath students end up working in the Australian health system after graduating.

Why is this an issue?

Researchers, including ourselves, use the term “placement poverty” to describe the impact mandatory placements can have on students. It can be a major barrier to students completing their degrees.

Students have repeatedly described widespread impacts of doing up to 1,000 hours of unpaid work to graduate – taking a toll on their income and mental health.

Kelly Lambert’s 2024 research suggests health and teaching students can incur a further $12,500–15,000 to the cost of degrees during unpaid placements.

Students have explained the placement hours mean they can’t work in their regular paid casual or part-time jobs – and may lose this work as a result.

What does this mean for students?

In the short term, if students are not supported to complete their placements, they may not have enough money for food or accommodation.

Our research found 29% of teaching and allied health students regularly skip meals while on placement. Some students also described sleeping in cars or driving excessive distances due to limited or expensive accommodation options near their placements.

If students are not supported in their placements, research suggests they can experience burnout and may not finish their degrees. Or they may not even begin them in the first place.

This is particularly the case for students from regional or rural communities (who may have further to travel), students with parenting or caring responsibilities, and students from low economic and otherwise disadvantaged backgrounds.

We also know its important to support students to do placements in rural, regional and remote areas – students who complete placements in these communities are more likely to return and work in those communities.

What do we need to do instead?

As a first measure, the government should expand eligibility criteria for the current payment to include other health disciplines and those who don’t currently meet the means testing threshold.

Research tells us financial hardship is not confined to students who qualify for Austudy, it is experienced across the board.

Students have also suggested interest-free short-term loans, subsidised parking (similar to hospital employees), and greater transparency about the costs associated with unpaid placements. International students have also said public transport subsidies would help them complete their placements.

Other, more significant changes could include apprenticeship-type compensation models for healthcare students, where students get paid to study as part of their training. These schemes are already available in Scotland.

Ultimately, we want to support more students to do health and teaching degrees to fill workforce gaps – not discourage them with high costs of studying.