Edited version of private ruling

Authorisation Number: 1011641342084

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Ruling

Subject: Self education expenses

Question and answer

Are you entitled to a deduction for self education expenses incurred whilst employed as a counsellor.

Yes

The scheme that is the subject of the ruling

You are a registered psychologist employed as a counsellor

You have completed a particular Vocational Graduate Diploma..

The course was developed to provide counsellors with the knowledge and skills necessary to effectively use particular therapy techniques with clients presenting issues such as anxiety, depression, trauma, addictive behaviour, interpersonal relationship issues, grief and loss.

The particular techniques are varied and can be used at various stages of therapy which you have listed.

The relevance of the course to you is that it explores best practice for the key stages of the counselling process (rapport, assessing issues, addressing issues and finalising therapy), develop client counselling plans and reviewing and evaluating counselling plans for a diverse range of different client groups. For each of these content areas the use and incorporation of the particular therapeutic techniques was studied.

The content covered in the course is directly related to the psychological counselling work that you perform as a counsellor. The course has covered the above in considerable depth. Not only have you studied the theory, numerous assessment tasks have ensured that the techniques have been practiced, observed, analysed and evaluated in detail. Frequent supervision sessions have been used to critique and evaluate progress in learning and applying the techniques in a professional and effective manner.

The scheme commences on:

01 July 2009

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1.

Income Tax Assessment Act 1936 Section 82A.

Reasons for Decision

The expenses of self-education are deductible under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) as work-related expenses.

Paragraphs 12 to 15 of TR 98/9 set out the relevance to the deductibility of self-education expenses. Self education expenses are deductible where they have a relevant connection to the taxpayer's current income earning activities. If the activities are based upon the exercise of a skill or some specific knowledge and the subject of the self-education maintains or improves that skill, a deduction is available. If the study leads to an increase in income from the activities in the future, a deduction is available.

The types of self-education expenses allowable include tuition fees, books and stationery, equipment, travel expenses to your place of education

If the expenses are allowable but relate to expenses connected with a prescribed course of education, then section 82A Income Tax Assessment Act 1936 (ITAA 1936) limits the amount of expenses allowable by excluding the first $250. The term 'prescribed course of education' is defined in the TR 98/9 at paragraph 27 as:-

.....an organised course of study, full-time or part-time, provided by schools, colleges or universities. It also includes a course provided by an institution or organisation, or a dedicated part thereof, whose primary function is the provision of systematic instruction, training or schooling in a subject, skill or trade.

28. In addition, the expression ''course of education" requires an element of continuity and of ongoing instruction or training. It therefore does not include short-term refresher courses, in-service activities or short-term development courses. These are considered to be more akin to on-the-job training.'

In making the calculation for the purposes of section 82A ITAA 1936, the total expenses include those necessarily incurred in undertaking the course, not just those which are deductible expenses.

In your case, you are a registered psychologist employed as a counsellor. The course you are undertaking is through a nationally Registered Training Organisation registered with the Vocational Education and Training Accreditation Board. The course you have completed relates to your current employment in that it is an accompaniment to the traditional particular therapies that counsellors and psychologists use. Therefore there is a direct nexus between your studies and your current employment duties.

The expenses of your studies would be deductible as self-education expenses under section 8-1 ITAA 1997. Your expenses for travel, computer expenses and equipment expenses and other expenses related to your studies would be deductible.

As the course of study is being undertaken through a registered training organisation, it would fall within the definition of a prescribed course of education for section 82A ITAA 1936. Therefore the limitations under that section would apply to exclude the first $250 of your total expenses.

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