Southern Grampians Shire Council this week agreed to lobby the federal government to reconsider the geographical classification used to determine whether a young person can access the payment.

From January next year only students who leave home to study, whose parents earn less than $150,000 a year and who live in a very remote, remote or outer regional area ? as defined by the Australian Bureau of Statistics ? can qualify for independent status by working at least 15 hours a week over two years or earning $19,532 in an 18-month period.

Warrnambool, Camper?down, Hamilton and Mortlake are considered inner regional, rendering most students in these centres ineligible for youth allowance or relocation scholarships.

Some prospective students on cities' fringes might fall into the outer regional category, even though they live the same distance from a university or TAFE.

"The real issue for this shire is that the classification system inappropriately classifies Hamilton as different to other towns within the shire, and also different to Horsham, for example, which is classified as outer regional," director of shire futures Michael McCarthy told the council meeting.

Cr Katrina Rainsford cited data from the new Great South Coast Health and Well-Being Profile, which shows that 29 per cent of the region's population have completed year 12 - 14.6 per cent below the state average.

Councillors agreed to speak with Wannon MP Daniel Tehan, the Municipal Association of Victoria and the mayors and chief executives of the Great South Coast region about youth allowance concerns.

Portland and Timboon are classed as outer regional under the government's system, meaning students there have a better chance of securing support.