Please accept this as a purely personal viewpoint. The "decision" height depends on several inter-related factors such as airspeed and flap setting at the time of go-around and expected climb performance on single engine clean.
The instructor should demonstrate the most critical scenario which is landing flap down, and Vref speed. Obviously this should be demonstrated at a safe height such as 1500 feet agl.
When the student has demonstrated consistent competency at this manoeuvre, then various other configurations can be shown, such as no flap and say 10 knots above normal Vref. Clearly this allows more latitude in terms of decision height.
The results usually reveal that a competent well trained student can safely execute a single engine go-around at sea level from 2-300 feet with full flap and Vref at point of go-around, and if flapless and Vref plus 10 knots then 100 feet. These are realistic figures.
Whether the pilot has low hours or not, he must demonstrate a high level of competency before being signed out. There should be no question of adding altitude for Mum and the kids just because of a low level of experience. He is either totally competent to execute a single engine GA or he is not. If not, then more dual until he reaches a safe standard.
It is also important to brief the student what actions he can take to minimise the chances of a bad pile up if he is forced to place the aircraft on to the ground in event of being below safe GA height. This vital point is often inadequately covered.