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Edited version of your written advice
Authorisation Number: 1012934066865
Date of advice: 8 January 2016
Ruling
Subject: Self-education expenses - Austudy
Question 1
Are you entitled to a deduction for expenses incurred during the period you were in receipt of Austudy for the relevant financial years?
Answer
No.
This ruling applies for the following periods:
Year ended 30 June 2015
Year ending 30 June 2016
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You studied full time.
You received an Austudy benefit in relation to your studies.
You incurred expenses in the 20YY financial year relating to your studies.
Relevant legislative provisions
Tax Laws Amendment (2012 measures No. 1) Act 2012 section 1.15,
Income Tax Assessment Act 1997 section 26-19,
Income Tax Assessment Act 1997 subsection 26-19(1),
Income Tax Assessment Act 1936 section 160AAA and
Social Security Act 1991 part 2.11A.
Reasons for decision
Changes to the deductibility of expenses incurred in relation to rebatable benefits such as Austudy were brought about in Section 1.15 Tax Laws Amendment (2012 measures No. 1) Act 2012 which disallows deductions for expenses incurred in gaining or producing a rebatable benefit from 1 July 2011.
Section 26-19 of the Income Tax Assessment Act 1997 (ITAA 1997) provides the rules for rebatable benefits. Subsection 26-19(1) of the ITAA 1997 states you cannot deduct under this Act a loss or outgoing to the extent that the loss or outgoing is incurred in gaining or producing a rebatable benefit.
Section 160AAA of the Income Tax Assessment Act 1936 defines 'rebatable benefits' to include Austudy benefits included under Part 2.11A if the Social Security Act 1997.
Application to your circumstances
Deductions for expenses you incur that relate to rebatable benefits, such as Austudy, are not claimable for the 2012 financial year and later years. Under section 26-19 of the ITAA 1997; you are not entitled to deductions for expenses you incurred in relation to your Austudy payments.