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Edited version of your written advice

Authorisation Number: 1051437000659

Date of advice: 5 October 2018

Ruling

Subject: Self-education expenses

Question

Are the course fees for the Bachelor of Nursing an allowable deduction?

Answer

No

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You began working as an Assistant in Nursing in the 20XX financial year

You have been working in various nursing homes and are currently employed in a nursing home

You enrolled in a Bachelor of Nursing in the 20XX financial year

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Reasons for decision

Work-related expenses are addressed under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997). This section allows a deduction for losses and outgoings which are incurred in the course of gaining or producing assessable income, unless the losses or outgoings are of a capital, private or domestic nature.

The Commissioner's view on the deductibility of self-education expenses is contained in Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses. In accordance with TR 98/9, expenses of self-education will satisfy the requirements of section 8-1 of ITAA 1997 if:

Therefore, provided there is sufficient connection between a course of self-education and current income earning activities, you are entitled to claim a deduction for your self-education expenses.

However, self-education expenses will not be deductible if the study is intended to:

Paragraph 48 of TR 98/9 refers to the decision of the High Court in FC of T v. Maddalena 71 ATC 4161; (1971) 2 ATR 541 (Maddalena’s Case). That case established that no deduction is allowable for self-education expenses if the study is designed to enable a taxpayer to get employment or to obtain new employment. The expenses would be incurred at a point too soon to be regarded as incurred in gaining or producing assessable income.

Nursing

The course of study you have undertaken is a Bachelor of Nursing. The Administrative Appeals Tribunal (AAT) has previously considered the issue of the deductibility of self-education expenses on a number of occasions, including in the context of nursing assistants undertaking nursing studies.

The Tribunal, in Assefa v. Commissioner of Taxation [2009] AATA 2, made reference to the Australian Bureau of Statistics publication, Australian Standard Classification of Occupations in considering the relationship between different jobs. In the health care sector, the publication provides details in relation to three levels of occupation – “personal care and nursing assistants”, “enrolled nurse” and “registered nurse”. The Tribunal has noted that a nursing assistant’s duties fell within the first classification, which dealt primarily with assisting patients with their daily living requirements - such as bathing, dressing, eating, communicating and mobility - under the guidance of a registered nurse.

In contrast, a registered nurse is required to perform duties such as planning and evaluating nursing care, assisting medical practitioners, observing and reporting on patients’ condition and supervising and coordinating the work of other health care workers such as the taxpayer. The Tribunal has concluded that an enrolled nurse and a registered nurse were nurses whereas a nursing assistant, or personal care assistant, are not.

It is considered that your circumstances are such that it would be correct to apply the decision in Maddalenas Case.

In your case, you have commenced studying for your Bachelor of Nursing whilst you are employed as a nursing assistant. The course is designed to enable you to obtain employment as a registered nurse. The subjects which form part of the course do not have the required connection to your position of a nursing assistant.

While we recognise that your study may assist you to perform some of your duties as an assistant in nursing, the skills or knowledge acquired as a result of undertaking the Bachelor of Nursing goes beyond that required in your job as an assistant. You are not currently employed as a nurse and as such your study is not to enable you to maintain or improve skill or knowledge in a profession you are already engaged in.

Therefore, the course cannot be said to have been undertaken to improve or maintain a specific skill or knowledge in a current income earning capacity, as the study provides you with skills in advance of those that you need to be an assistant in nursing.

The essential character of the expenses is that they were incurred to enable you to complete the course of education and earn assessable income from your future employment as a registered nurse.

The self-education expenses are considered to have been incurred at a point too soon to be regarded as incurred in gaining or producing assessable income. Consequently, your self -education expenses are not deductible under section 8-1 of the ITAA 1997.

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