Education Tax Refund - what you need to know

Introduction

The Education Tax Refund (ETR) helps eligible families and independent students meet the cost of primary and secondary school education.

You can claim the ETR for education expenses you incur while your child attends primary or secondary school.

Families and approved care organisations can claim 50% of their eligible educational expenses if:

they received family tax benefit (FTB) Part A for the child, or
a payment was made for the child that stopped them from receiving FTB Part A for that child.

Independent students may also be eligible to claim the ETR.

The maximum you can claim is 50% of eligible expenses up to:

$750 for each eligible child in primary school - that is, a refund of up to $375
$1,500 for each eligible child in secondary school - that is, a refund of up to $750.

If your expenses exceed your refund limit for the year, any excess can go towards your following year’s refund claim, as long as you are still eligible.

The first year you can claim the ETR is for the 2008-09 year (1 July 2008 to 30 June 2009).

Am I eligible?

You are eligible to claim an Education Tax Refund (ETR) for the period 1 July 2008 to 30 June 2009 if:

you had eligible education expenses for a child, and
the child was in primary or secondary school, and
you received family tax benefit (FTB) Part A for the child, or
a payment was made for the child that stopped you from receiving FTB Part A for that child, or
your child stopped full-time school during the year and received sufficient income to stop you receiving FTB Part A.

If you are an independent student attending secondary school or a secondary course of education provided at an educational institution such as a TAFE, you may also be eligible.

I have a primary and/or secondary school child

You are eligible to claim an Education Tax Refund (ETR) for the 2008-09 year, if on a day in the period 1 July 2008 to 30 June 2009 you incurred eligible education expenses and:

you received family tax benefit (FTB) Part A for the child
or
a payment was made for the child which stopped you from receiving family tax benefit (FTB) Part A
or
your child stopped full-time school during the year and received sufficient income to stop you receiving family tax benefit (FTB) Part A, and
your child was enrolled or registered in a primary or secondary school course during any day in the same half-year as the day occurred, and
your child attended their course at least one day in that half year.

You do not have to be eligible for the entire year to be entitled to claim the ETR. You can claim the ETR for any period during the year you satisfied the eligibility requirements.

Where a child receives a payment that stops FTB Part A being paid, parents need a written statement agreeing to what percentage of the ETR they will each claim - this is called an agreed percentage. If no agreed percentage is in place, their agreed percentage will be 50%.

I am an independent student

If you are an independent student, you are eligible to claim an Education Tax Refund (ETR) for the 2008-09 year if on a certain day during the period 1 July 2008 to 30 June 2009 you incurred eligible education expenses and you:

received a social security pension or benefit, a labour market program payment or a prescribed educational scheme payment including

Youth Allowance
ABSTUDY Living Allowance
Veterans’ Children Education Scheme and payments under the scheme to provide education and training under section 258 of the Military Rehabilitation and Compensation Act 2004, or
a disability support pension

were an independent person for the purpose of the payment
were undertaking full-time secondary school studies at secondary school or an education institution such as a TAFE
were under 25 years of age
were an Australian resident (within the meaning of the Social Security Act 1991) or a special category visa holder (within the meaning of the Migration Act 1958), and
lived in Australia.

You do not have to be eligible for the entire year to be entitled to claim the ETR. You can claim the ETR for any period during the income year you satisfied the eligibility requirements

What is the schooling requirement?

A child or an independent student satisfies the schooling requirement for each six month period, commencing 1 July or 1 January, if they:

are registered or enrolled in a primary or secondary school course provided at an educational institution such as a school or TAFE, or
are registered or enrolled with the education authority of their state or territory as a home schooled student, or
are registered or enrolled in a course of study or instruction which the Minister administering the Student Assistance Act 1973 determines that the Education Tax Refund applies for, and
attended the course of study or instruction, or received the home schooling, at least one day in a six-month period commencing from 1 July or 1 January.

Where a child or independent student starts or leaves school during the year, or for other reasons only satisfies the criteria for one half of the year, you or the independent student will be entitled to claim the refund for that half of the year.

Example 1 – starting primary school

Grant was enrolled in primary school in December 2008 but started his first day of primary school in February 2009. In January, his parents bought him stationery including crayons and paints, and other learning materials. Grant satisfies the schooling requirement from 1 January to 30 June 2009 as he was enrolled at a school and attended school at least one day in that six month period. Subject to satisfying the other eligibility requirements, Grant’s mother Pam, who receives FTB Part A payment can claim half of the Education Tax Refund (ETR) in her 2008-09 tax return. As Grant did not attend school for the first half of the 2008-09 year 1 July to 30 December 2008, Pam cannot claim the refund for of this period.

Example 2 – transition from primary to secondary school

Anthony commences Year 7 at a New South Wales secondary school in February 2009. Anthony’s parents purchased a computer for him in March 2009. As Anthony also attended year 6 at primary school the year before, he satisfies the schooling requirement for the whole of the 2008-09 income tax year. As Anthony’s father Peter receives FTB Part A payment, he is entitled to claim the full amount of the ETR in his 2008-09 tax return.

In addition, as Anthony transitioned from primary school to secondary school during the 2008-09 year, Peter, Anthony’s father, is entitled for the amount for a secondary school student for the whole year up to $750.

Example 3 – an independent student

Will is 22 and independently completing his secondary schooling. He has a part-time job and receives Youth Allowance. From 1 July 2008 to December 2008 he completed year 11. Will is an independent student for the purposes of the ETR and in August 2008 he purchased a computer for his studies. In February 2009, Will went on a six-month overseas school exchange program, paid for from fundraising. In this situation, Will could only claim half of the refund for his educational expenses as he did not attend school in Australia in the six-month period commencing 1 January 2009.

My child stopped full-time school during the year

If your child stopped full time study part way though the year, you will be eligible for the Education Tax Refund (ETR) for the part of the year that your child met the schooling requirement.

Example 1 – finishing secondary school and starting university

Katie’s daughter Asher completed full-time secondary school in December and has since commenced university in the second half of the financial year. Katie incurred $2,000 in eligible expenses in the final year of Asher’s secondary schooling. Therefore, she is entitled to claim a refund for half of the financial year. The maximum ETR that Katie can claim is $375 (50% of $750).

Example 2 – finishing secondary school and starting work

Bill’s son Declan completed full-time secondary school in December and works for the remainder of the financial year earning more than the child income test limit for him to be an FTB child. Even though Declan’s income for the year is over the child income test limit, he met the schooling requirement for half of the financial year. Therefore, Bill can claim a refund for Declan’s last six months of school – up to $375 (50% of $750).

What is family tax benefit (FTB) Part A?

FTB Part A is designed to help with the cost of raising children. It is paid to a parent, guardian, carer (including foster carer), eligible grandparent or approved care organisation.

To be eligible for family tax benefit (FTB) Part A you must:

have a dependent child aged under 21, or
have a dependent full-time student aged 21 to 24, and
have care of that child for 35 per cent of the time or more, and
meet residential requirements, and
have income under a certain amount (this amount varies depending on number and age of children).

A child or student cannot be a dependant if they:

receive a pension or benefit
receive a labour market program payment
are aged 5 to 15, not studying full-time and their annual income is $12,287 or more
are aged 16 to 24 and their annual income is $12,287 or more
are aged 16 to 24 and receiving a prescribed education scheme payment such as ABSTUDY, or
are aged 21 to 24 and not studying full-time.

If you are unsure if you received FTB Part A or are eligible to receive it you should contact the Family Assistance Office (FAO).

You can contact the FAO by any of the following means.

Visit the FAO website at www.familyassist.gov.au
Phone the FAO on 13 61 50 between 8.00am and 8.00pm (local time), Monday to Friday.
Visit your nearest FAO. Offices are located in Medicare offices and Centrelink customer service centres.
Phone 13 12 02 if you do not speak English well.
Use the teletypewriter (TTY) service on 1800 810 586 (this service is only available via a teletypewriter machine) if you have a hearing or speech impairment.

Payments which could stop you from receiving family tax benefit (FTB) Part A

You may be eligible to claim an Education Tax Refund (ETR) if a payment was made for your child that stopped you from receiving FTB Part A during the period 1 July 2008 to 30 June 2009. These payments include:

Youth Allowance
Disability Support Pension
ABSTUDY Living Allowance
the Veterans’ Children Education Scheme
Student Financial Supplement Scheme, and
the scheme to provide education and training under section 258 of the Military Rehabilitation and Compensation Act 2004.

What is an eligible education expense?

An eligible education expense is one that is:

incurred by an eligible person
relates to the education of the child or independent student
of a kind that is specified in the legislation as an eligible education expense, and
incurred on a day when the child or independent student satisfied the schooling requirement.

You cannot claim the ETR for education expenses if:

it is an allowable tax deduction or subject to another tax offset, or
you received or are entitled to receive payment or property as reimbursement or payment for the expense under a Commonwealth Government or legislative prescribed benefit, grant or subsidy.

Example – an apprenticeship as part of secondary school studies

Jack is enrolled in a carpentry apprenticeship as part of his secondary school studies and purchased trade tools during the year worth $2,000. As Jack is an apprentice, he is eligible for a Commonwealth grant of $800 to assist with the purchase of trade tools. Since he will receive $800 towards the cost of his tools, Jack’s ETR education expenses will be reduced to $1,200.

Items which qualify as eligible education expenses

Eligible education expenses are items that support a child’s or independent student’s primary or secondary school education. They include the purchase, lease, hire or hire-purchase costs, repairs and running costs of:

laptops, home computers and associated costs
computer-related equipment such as printers, USB flash drives, as well as disability aids to assist in the use of computer equipment for students with special needs
home internet connections, including the costs of establishing and maintaining them
computer software for educational use
word processing, spreadsheet, database and presentation software, internet filters and antivirus software
school textbooks and other paper-based school learning material, including prescribed textbooks, associated learning materials, study guides and stationery, and
prescribed trade tools - for example, tools required to complete a school-based apprenticeship.

Remember, eligible expenses should be listed separately and receipts kept for the purposes of calculating your claim. Receipts may be necessary to prove the information you provided on your claim.

Expenses that are not eligible

Education expenses that are not eligible include:

school fees
school uniform expenses
student attendance at school-based extra curricular activities such as excursions and camps
tutoring costs
sporting equipment
musical instruments
school subject levies - for example, payment for consumables for particular subjects such as woodwork, art or home science
building levies
library book fees
school photos
donations
tuck shop expenses
waiting list fees
transport
membership fees, and
computer games and consoles.

Sharing eligible education expenses

Where an eligible education expense has been incurred for more than one eligible child, the expense can be shared between the children. However, this is subject to all the children having access to the purchased item and you purchasing the item on a day when you satisfied the eligibility requirements for the Education Tax Refund for each child. This is called pooling.

Example – pooling expenses for two or more eligible children

Ben and Natalie have twins in secondary school. Ben purchased a computer worth $3,000 which both children can access. Ben can pool the expense of the computer between the twins and claim $1,500 in eligible expenses for each child, making a total of $3,000 expenses that are claimed.

Excess eligible education expenses

Eligible education expenses in excess of what can be claimed in a year can be carried over to the following year. Eligible expenses that are not claimed in the income year in which they are incurred or in the next income year are lost and cannot be claimed in later years.

Example – carrying excess eligible education expenses forward to the following year

Lachlan is in year 10 and his parents purchased a computer, a printer and educational software for his study totalling $1,800. Lachlan also attended the school the year before so he satisfies the schooling requirement for the whole of the income year. As Lachlan’s father Robert receives FTB Part A payment he would be eligible to make a claim for the whole of the income year. For Robert to determine if he has excess eligible education expenses for the current year he would halve the eligible education expenses ($900) and compare the amount to the Education Tax Refund limit ($750 for secondary school student ) he can claim. In this situation, there is an excess of $150. Robert would double the excess ($300) to restore it to the original expense value. Assuming Robert and Lachlan still meet the eligibility and schooling requirements for the Education Tax Refund in the following income year, Robert can include the $300 of expenses in the following year when calculating his Education Tax Refund entitlement for that year.

How much can I claim?

The ETR is 50% of eligible education expenses incurred for the period 1 July 2008 to 30 June 2009. You can claim up to:

$750 for each eligible child in primary school - that is, a refund of up to $375
$1,500 for each eligible child in secondary school - that is, a refund of up to $750.

How much you can claim depends on whether you have full care of the child, you have shared care of the child and/or if you have an agreed percentage.

You will have an agreed percentage if:

you split your family tax benefit with your spouse or
you are not eligible for family tax benefit and you don’t have a written agreement to state who will claim the ETR.

I have full care of all my children and no agreed percentage or I am an independent student

Use the following steps to calculate your ETR:

Step 1

Work out your total eligible education expenses for all eligible children

$

A

Step 2

The maximum tax offset amount for one child

Primary = $375, or

Secondary = $750

$

B

Step 3

How many days in the year were you eligible?

C

Step 4

Work out your maximum tax offset amount for this child
(B x C) divided by 365 – round to two decimal places

D

Step 5

Repeat Steps 2 to 4 for each additional eligible child

Step 6

Add the amounts from D for each child

$

E

Step 7

Multiply your expenses from A by 50%

$

F

Step 8

Use the lower of the amounts at E or F
Write the amount at G on your claim

G

Step 9

Work out if you have an excess
If you used F, your excess =
If you used E, your excess is (F minus G) x 2

$ nil
$

L

Example

Nick and Mel have three school children and have incurred eligible education expenses worth $3,900. Max and Gus are in secondary school and Grace is in primary school. Mel receives FTB Part A for their children and would calculate her entitlement using the following table.

Number of primary school students	1 (Grace)	X	$375 (B)	X	365 (C)	/365	=	$375	D
Number of secondary school students	2 (Max & Gus)	X	$750 (B)	X	365 (C)	/365	=	$1,500	D
Maximum refund amount						Total of Ds	=	$1,875	E
Eligible education expenses	$3,900 (A)			X		50%	=	$1,950	F
Lesser of E and F = ETR amount								$1,875	G
If E is used, Excess = (F-G)x 2	$1,950 (F)	-	$1,875 (G)	X	2		=	$150	L

$150 will be the excess Mel can add to her other eligible education expenses in 2010 to calculate her ETR. She would claim this in her 2009-10 tax return/claim, as long as Mel still meets the eligibility requirements.

I share the care of a child or have an agreed percentage

(If you have both shared care and agreed percentage for the eligible child you will need to use the ETR calculator which will be available from 1 July 2009).

You can use the following steps to calculate your Education Tax Refund.

Step 1

Work out your total eligible education expenses

$

A

Step 2

Multiply A by your agreed percentage

$

B

Step 3

Calculate the maximum tax offset amount for this child

Primary = $375, or

Secondary = $750

$

C

Step 4

How many days in the year were your eligible?

$

D

Step 5

Multiply D by your shared care and agreed percentage

E

Step 6

Work out the maximum tax offset amount for this child
(C x E) divided by 365 - round to two decimal places

F

Step 7

Repeat Steps 3 to 6 for each child

Step 8

Add the amounts from F for each child

$

G

Step 9

Complete your ETR calculation
Multiply your expenses from B by 50%

$

H

Step 10

Use the lower of G or H
Write the amount at I on your tax claim

$

I

Step 11

Work out your excess
If you used H, your excess =
If you used G, your excess is (H minus G) X2 ) =

$ nil
$

L

Use the amount at L to add to your eligible education expenses in 2010 to calculate your ETR in your 2010 tax return

Education Tax Refund calculator

Go to the Education Tax Refund calculator.

How do I claim the Education Tax Refund (ETR)?

If you are required to lodge a tax return you can claim your Education Tax Refund (ETR) at question T6 in the 'Tax offsets' section of your Tax return for individuals 2009.

If you are not required to lodge a tax return for 2008-09 you can claim the ETR by reading the Education Tax Refund instructions and claim 2008-09 and then completing the Education Tax Refund for individuals 2009 claim available from the Tax Office from 1 July 2009 by:

viewing the ETR instructions and downloading the ETR form
phoning the Tax Office publications distribution service on 1300 720 092, or
visiting a Tax Office shopfront.

You can lodge your completed ETR claim by:

having a completed Education tax refund for individuals 2009 form in front of you and phoning 13 28 65 – available 24 hours a day 7 days a week, or
by mail.

If you are lodging an Education tax refund for individuals 2009 claim and/or a claim for baby bonus and/or an application for a refund of franking credits, you must send them to us together in one envelope.

For more information

Read the answers to parents' commonly asked questions relating to the ETR
Call 13 28 61.
Visit a Tax Office shopfront
Write to us at

GPO Box 990
in your capital city

Last Modified: Tuesday, 22 September 2009

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