Tax Deductions for Self Education Expenses

Dated: May 2011

In a case of ‘David vs Goliath’, a student receiving Youth Allowance successfully argued (all the way to the High Court) that she was entitled to claim her education costs as a tax deduction against that income.

The ATO has acknowledged that students in this situation can, in their tax returns relating to the 2006/07, 2007/08 ,2008/09 and 2009/10 years, either:

a) Accept a deduction of $550 which the ATO will automatically process, or
b) Claim over $550, provided the total costs can be substantiated.

However, the victory has proven to be short lived. The Government has announced that it will amend the law from 1 July 2011 to ensure that taxpayers cannot claim deductions against any government assistance payment.

Anybody who is in this situation and is considering making a claim for their self education expenses is encouraged to contact us.