The tax law will be amended to disallow self-education expenses against all Government assistance payments.  The change is being introduced in response to the 2010 High Court decision in FC of T v Anstis201, which the tax office lost.

It has been a simple and long standing income taxation principle that expenses incurred in gaining or producing assessable income, will be deductible expenses.  The Tax Office said if the income was Youth Allowance, we don’t want this principle to apply.  The High Court said it should.

The Government has now decided it shouldn’t!

Individuals who receive Youth Allowance (Student) will be able to claim a deduction for expenses incurred for the 2010 -2011 income year, but not after 1 July 2011.