Tax Time - Self Education Expenses
20 Nov 12
Get Ready, It is tax time!
In a recent decision, the Federal Court has allowed Youth Allowance recipient taxpayer, to deduct self-education expenses incurred in pursuing a teaching degree as the costs were sufficiently related to her receipt of the Youth Allowance.
To be entitled to the Youth Allowance, the taxpayer was required to be:
- Enrolled in a course of education at an educational institution
- Undertaking at least three quarters of the normal amount of full time study in the relevant course; and
- In the Social Security Secretary’s opinion, be making satisfactory progress towards completing course.
The court concluded that, as the Youth Allowance is assessable income, it follows that any expenditure incurred in deriving that assessable income is deductible.
However, the ATO has recently appealed the decision in the Federal court based on the ATO’s view that Self Education Expenses are not deductible against payments made under certain Commonwealth Educational Assistant Schemes, such as AUSTUDY, ABSTUDY, etc, even if the payments are assessable income.
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