Costs incurred in gaining Youth Allowance held to be deductibe
- Arnold Shields
- Feb 18, 2010
- 2 min read
Updated: Jun 23
Are you a full-time university student receiving Youth Allowance? You may be able to claim tax deductions related to your study expenses. This follows a landmark decision by the Full Federal Court in the Commissioner of Taxation v Anstis case.
The Case Overview
In this case, the taxpayer was studying full-time to become a teacher and received Youth Allowance as income support. On their tax return, they claimed $920 in expenses incurred while deriving this income. The ATO initially denied the deductions.
However, the Federal Court ruled in favour of the taxpayer, confirming that the expenses were deductible. The key findings were:
Youth Allowance is assessable income under general tax law.
The correct test for deductibility is whether the expense was incurred in gaining or producing that income.
The expenses were not incurred before the taxpayer started the activity (studying full-time) which gave rise to the income.
The activity that produced the income, full-time university study, began at enrolment and continued throughout the payment period of the Youth Allowance.
What Expenses Were Deductible?
In this case, the student successfully claimed deductions for:
Travel expenses
Stationery and study supplies
Depreciation of a computer used for study
Textbooks and course materials
These deductions reduced the taxable amount of their Youth Allowance.
Should You Be Claiming These Deductions?
If you're a full-time student receiving Youth Allowance and incurring expenses directly related to your study, you may be entitled to deductions. However, the rules can be complex, and it's essential to ensure you meet the ATO’s strict criteria.
Important Note: This article is for general information and should not be relied upon as tax or financial advice. Individual circumstances vary, and we strongly recommend you seek professional guidance before making any claims.
If you’d like tailored advice about your situation, get in touch with our team.
Disclaimer:
The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.
