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22 November 2010

Claiming deductions for education expenses against youth allowance

Previously the Tax Office has held that self education expenses are not deductible where a Commonwealth education assistance scheme (e.g. Austudy, Abstudy, etc) provides payments in the nature of assistance.

However, following a successful High Court appeal against the decision of the ATO to deny a claim for education expenses for a part time employee at Katies, who also received Youth Allowance, students who have received Youth Allowance may now be entitled to a tax deduction for their education expenses.

While the Tax Office has urged people who believe they may be affected by the ruling to be patient as it considers the impact of the judgement, we are alerting you to the possibility of a claim in 2010, or of an amendment for up to 2 years (for most taxpayers).

We will advise further as the position becomes clearer.

HELP debt statement information

In previous years we have received HELP debt statements from the ATO, and forwarded them to clients. However this year the ATO has changed the process, such that in June each year they send an account information statement to the latest home address shown on their records. If a home address is not recorded, it is sent to the postal address on your latest income tax return.

An account information statement will only issue if there has been 'activity' on your account in the previous 15 months. Activity includes any of the following:
• new debt added to your account
• compulsory repayment raised on your notice of assessment
• HECS-HELP benefit applied
• voluntary repayment made by you or someone on your behalf.

You will not receive a statement if the only activity on your account is the annual indexation adjustment.

Your statement gives you the following information:
• the opening balance of your account at the previous 1 June
• a list showing all changes to your account for the past year, including:
- new debts (except those from the first half of 2010)
- variation to debts
- remission of debts
- compulsory repayments
- voluntary repayments
– HECS-HELP benefits
• the indexation amount applied to the account on 1 June
• the new balance of your account
• the amount you need to pay if you wish to finalise your account in one voluntary repayment.

If you have any questions in relation to your HELP statement , please contact us on 07 3378 7733, or the Tax Office's HELP information line on 13 28 61.

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This Newsletter, of necessity, has dealt with matters of a technical nature in general terms only. Clients should contact us for detailed information on any of the items in the Newsletter. No responsibility for loss occasioned to any person acting or refraining from acting in reliance upon any material in this Newsletter can be accepted by any member or employee of the firm.


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