As part of the Government's changes to the youth allowance system, which it has done primarily to stop city students still living at home getting government payments, any student living within 90km of their uni will not be eligible for the fortnightly student allowance.

While the Federal Government is expected to delay the changes, so students currently on a gap year will not be affected, if passed they are expected to come into force on January 1.

Until now students could work for one year, earning enough to make them financially independent of their parents and eligible for youth allowance.

Under the current rules, students who earn $19,532 in an 18-month period are considered independent from their parents and eligible for youth allowance, but under the proposed rules, students would have to work at least 30 hours a week for at least 18 months to qualify through workforce participation.

The proposed changes, which were to take effect from January 1, have derailed the plans of thousands of students who finished secondary school last year and took a gap year in order to qualify for the allowance next year.

But the Government is now expected to delay the changes for 12 months so that students who took decisions last year based on the existing rules are not disadvantaged.

But this grace period only exists for students who live more than 90 minutes from a university, leaving Inverell students who intend to study at UNE in somewhat of a pickle. Macintyre High School careers advisor Ian Ryan said about one third of students from Macintyre High School received entry to UNE and the proposed legislation would be a disaster for them.

"A stack of kids from here go to UNE because we also have the early entry scheme, and to say they live to close is ridiculous," he said. Students from low-income families will still be automatically eligible for youth allowance. The changes will reduce the age of independence from 25 to 22 and will increase the parental and personal income test thresholds.