Edited version of your written advice

Authorisation Number: 1013094494633

Date of advice: 21 September 2016

Ruling

Subject: Deductibility of self-education expenses

Question

Can you claim costs associated with the completion of your studies in your Initial Registration for Overseas Nurses (IRON) as a self-education expense?

Answer

No

This ruling applies for the following period(s)

Year ended 30 June 20YY

The scheme commences on

01 July 20XX

Relevant facts and circumstances

You work as a Registered Nurse.

To gain registration as a registered nurse with Australian Health Practitioner Regulation Agency (AHPRA) you completed the Initial Registration for Overseas Nurses (IRON) Program.

You commenced studying IRON and gained employment after completing your studies.

Prior to completing the IRON program and receiving registration with APRA you worked as a Personal Care Assistant (PCA).

You have incurred expenses in your studies to gain the necessary qualifications and registration as a Registered Nurse (Division 1), General.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Further issues for you to consider

It is noted that you have already lodged your tax return for the relevant income year and have received a notice of assessment. It is recommended that you review your assessment in light of the outcome of this ruling and request an amendment if appropriate.

Details on how to request an income tax amendment can be found on our website at www.ato.gov.au. Go to our website and type in How to request an income tax amendment for full details or alternatively key in QC33797.

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.

Taxation Ruling TR 98/9 discusses the circumstances under which self-education expenses are allowable as a deduction. A deduction is allowable for self-education expenses if a taxpayer's current income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of the self-education enables the taxpayer to maintain or improve that skill or knowledge (Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60, (1961) 12 ATD 348.

Taxation Ruling TR 95/15 specifically deals with self-education for nurses.

• A deduction is allowable for self-education expenses if the education is directly relevant to the taxpayer's current income-earning activities. This particularly applies if a taxpayer's income-earning activities are based on skill/knowledge and the education enables him or her to maintain or improve that skill/knowledge.

• A deduction is allowable if the education is likely to lead to an increase in the taxpayer's income from his or her current income-earning activities.

• A deduction is not allowable if the education is designed to enable a taxpayer to get employment, to obtain new employment or to open up a new income-earning activity (FC of T v. Maddalena 71 ATC 4161; 2 ATR 541).

• Self-education includes courses undertaken at an educational institution (whether leading to a formal qualification or not), attendance at work-related conferences or seminars, self-paced learning and study tours.

• Self-education expenses include fees, travel expenses (e.g., attending a conference interstate), transport costs, books and equipment.

A case was discussed in ASSEFA v. Commissioner of Taxation AATA 2 in which an assistant nurse was disallowed a claim for self-education expenses. It was found that a nursing assistant is not the same as a registered nurse or enrolled nurse.

"Based on the ASCO descriptions, there is a significant difference between the position of Enrolled Nurse and Registered Nurse, on the one hand, and Personal Care Assistant/Nursing Assistant on the other hand. In addition to the requirement of registration or licensing, the Enrolled Nurse and the Registered Nurse have entrusted to them a range of activities that could not be undertaken by the Nursing Assistant. At its simplest level, the Enrolled Nurse and the Registered Nurse are nurses; the Nursing Assistant, or Personal Care Assistant, is not."

The case compared the roles of a nursing assistant to the roles of an enrolled or registered nurse using extracts from an Australia Bureau of Statistics publication. The current versions of this publication remain unchanged. The tribunal found that -

"A person does not need to have a degree in Nursing, or to be studying for such a degree, to be employed as a Personal Care Assistant or Nursing Assistant. The ASCO extract for "Personal Care and Nursing Assistants" indicates the "entry level requirement" is an AQF Certificate II or higher. Neither of Mrs Assefa's employers required her to be undertaking the degree course: ST4-122 and ST5-124."

Application to your circumstances

The Tribunal has concluded that an enrolled nurse and a registered nurse were nurses whereas a nursing assistant, or personal care assistant, were not. In your case, it can be noted that the qualification which you studied are mandatory for a registered nurse but not for a personal care assistant.

Studies undertaken in order to obtain employment in a new field are considered to have been incurred at a point too soon to be regarded as incurred in gaining or producing assessable income and such expenses are not deductible under Section 8-1 ITAA97.

Furthermore to claim a deduction for a work related expense you must have incurred the expense while performing your job as an employee. You incur the expense in an income year when you receive a bill or invoice for the expense that you are liable for and must pay.

ATO view documents

Taxation Ruling TR 98/9

ASSEFA v. Commissioner of Taxation [2009] AATA 2

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