Mark O'Connor, Assistant Commissioner, Micro Enterprises and Individuals attended the meeting for this agenda item.
On 11 November 2010 the High Court affirmed that recipients of Youth Allowance payments could claim their study expenses as a tax deduction (FCT v Anstis). The Commissioner of Taxation issued a media release on 17 December 2010 advising that he would automatically amend assessments to allow eligible full-time students in receipt of Youth Allowance a deduction of $550 per year for study expenses for the 2007-10 income years.
The ATO has to date written to a total of 248,478 eligible recipients advising of this automatic amendment process. Tax practitioners with eligible clients have also been advised of the likely numbers of amended assessments that they would be receiving on behalf of their clients.
The letter sent to eligible recipients advises them of the years that they are eligible to receive a deduction. If the recipient has records to support a deduction of more than $550 in an income the year, the letter also provides advice on how to opt out of the automatic amendment process.
If an individual chooses to opt out of the automatic amendment process they are required to lodge amendment requests for all years in which they wish to claim study expenses. Individuals have 28 days from receipt of the letter to opt out, however if they miss this date they can still lodge amendment requests at a later date.
Individuals can also choose an interactive voice response system - 1300 766 034 to update bank account/address details and to opt out of the automatic process. In response to a query regarding the eligibility of recipients of the pensioner education supplement to claim their study expenses as a tax deduction, Mark advised that the High Court decision related solely to Youth Allowance recipients.
As well as writing directly to eligible recipients and their tax agents, the ATO has published new web content on www.ato.gov.au and has provided further information to tax practitioners in the form of a tax practitioner webcast.
Feedback received to date indicates that the community has welcomed the automatic amendment strategy.
Amended assessments are scheduled to issue from 15 April 2011 and will be completed by 31 May 2011, resulting in minimal impact on Tax Time 2011.
From the 2011 financial year, students will be required to keep receipts in order to be able to claim their study expenses. The automatic $550 deduction only relates to the 2007-10 financial years. This information will be contained in Tax Time publications including TaxPack.
A suggestion was made that some messaging should be provided in February/March 2012 to remind students of the need to retain receipts in order to claim study expenses from the 2011 financial year onwards.
A request was made for an article, about the need to retain receipts and other relevant information, to be made available for member associations to publish in their association newsletters. This will also be included in the Micro Enterprises and Individuals Consultative Forums Newsletter.
Action item
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PTAG/0411-02
An article, for use in association newsletters, in relation to documentation and other requirements for self-education expense claims (for Youth Allowance recipients) will be provided to members and will also be included in the Micro Enterprises and Individuals Consultative Forums Newsletter.
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Responsibility
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Mark O'Connor
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Due date
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16 June 2011
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Sections within Agenda items
Last Modified: Wednesday, 16 January 2013