Automated Tax Deduction for Youth Allowance Recipients

The Tax Office has released its long-anticipated response to a recent High Court decision which held that a student taxpayer was entitled to a deduction for education expenses incurred in receiving Youth Allowance income.

The Tax Office said it recognises that the High Court found that the expenses in this case were incurred in gaining or producing the Youth Allowance income received, and were not of a private nature. The Tax Office said it accepts that similar expenses would also be deductible to other full-time students receiving Youth Allowance income.

As a result, affected full-time students who received Youth Allowance and paid tax in the 2007, 2008, 2009 or 2010 income years will receive a notice from the Tax Office advising that their assessments will be amended to include a $550 tax deduction for study expenses for each year they are eligible.

If you believe you are eligible to claim a higher amount than the automatic $550 deduction, please contact our office. However, you must have the documentation to support your claim.