Education tax refund for Australian families

On 1 July 2008 the Government introduced a 50 per cent Education Tax Refund on eligible educational expenses, helping working families meet the cost of educating their children through primary and secondary school.
Eligibility to claim the Education Tax Refund

• Those entitled to Family Tax Benefit PPart A (FTB PART A) who have children undertaking primary or secondary school studies for the relevant financial year.
• Parents with school children undertaking primary or seconday school studies who would be an eligible child for FTB Part A purposes, but for the fact that child receives payments of allowances from: Youth Allowance; Disability Support Pension; ABSTUDY; the Veterans’ Children Education Scheme; or the Military Rehabilitation and Compensation Act 2004.
• School children undertaking primary or secondary school studies, who are assessed as independent of their parents, or are in receipt of one of these payments or allowances are also eligible.
• Families with registered home-schooled students can also claim the Education Tax Refund.

Eligible families and Education Tax Refund can claim up to:

To be eligible for the Education Tax Refund families must receive Family Tax Benefit (Part A). Those eligible will receive the full value of the Education Tax Refund, regardless of their income tax liability.

Claiming the Education Tax Refund

• Claims for the Education Tax Refund can be made either in your annual income tax return or through the ATO directly.
• Parents and eligible independent students who do not lodge an income tax return can claim the Education Tax Refund through the Australian Taxtion office using the appropriate 2008-09 year form.

What to do now? Keep records and receipts of education expenses relating to the Education Tax Refund from 1 July 2008 onwards.

Eligible education expenses include:

• laptop computers, home computers and associated costs, including the repair and running costs of computer equipment
• computer-related equipment such as printers, USB flash drives, and accessories designed and manufactured solely or predominantly for use with a laptop or home computer – for example laptop bags and wireless mouse
• disability aids to assist in the use of computer equipment for students with special needs
• home internet connections, including the costs of establishing and maintaining them
• computer software for educational use
• word processing, spreadsheet, database and presentation software, and internet filters and antivirus software
• school textbooks and other paper-based school learning material, including prescribed textbooks, associated learning materials, study guides and stationery – for example, pencils, pens, compasses and glue
• prescribed trade tools.

Expenses that are not eligible for the Education Tax Refund include:

• school fees
• school uniform expenses
• student attendance at school-based extra curricular activities such as excursions and camps
• tutoring costs
• musical instruments
• sporting equipment
• library book fees
• building levies
• school subject levies – for example, payment for consumables for particular subjects such as woodwork, art or home science
• school photos
• donations
• tuck shop expenses
• waiting list fees
• transport
• membership fees
• computer games and consoles.

You cannot claim for an expense to the extent that:

• it is tax deductible
• it is subject to another tax offset
• you receive, or are entitled to receive, a reimbursement or payment under an Australian Government benefit, grant or subsidy.

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50% Child Care Tax Rebate

The Government will increase child care assistance, lifting the Child Care Tax Rebate from 30 per cent to 50 per cent of out of pocket costs, and increase the annual cap from $4,354 to $7,500 per child. The rebate will also be paid quarterly to give parents assistance closer to when they incur out of pocket expenses. This assistance is in addition to any Child Care Benefit payable.

The rebate, previously claimed in the annual income tax return, is now claimed from the Family Assistance office after the tax return is processed.
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Family, marriage and Children – Q & A’s

I have married during the year. What effect does this have on my tax return?

If you married during the year it may mean you can claim a rebate for your spouse and/or a Medicare reduction, depending on your spouse’s income. You will need to know the taxable income of your spouse before and after marriage. If you wish to claim the Family Tax Benefit, then you will need to know your spouse’s income and lodge the form with this information included.

I haven’t lodged my 2007 tax return and believe that I was entitled to claim Family Tax Benefit for that year. Am I too late?

No. You can still lodge your return and make a claim for FTB for 2007. You will need to lodge your return by 30th June, 2009 or you will not be able to make an FTB claim for that year. Taxpayers have two years to lodge a tax return if they intend to claim FTB or receive a top-up payment. The deadline for the making an FTB claim in the 2008 tax return will be 30th June, 2010.

Can I claim for the maintenance I pay my ex wife for my children?

No. Maintenance payments are not claimable.

Can I claim anything for the cost of my children’s education?

No. Child education costs are not a deduction for tax purposes.

I have incurred Child Care Expenses over the last couple of years. What do I have to do to claim the 30% Child Care Tax Rebate?

If you incurred approved child care expenses in the 2006 income year and qualified for Child Care Benefit from the Family Assistance Office, you may be able to claim the 30% Child Care Tax Rebate on your 2007 return. You will receive a letter from the FAO giving the details that you require to make the claim. If the rebate is greater than your tax liability, the excess can be transferred to your spouse. The rebate is limited to $4096 per child for that year.
If you incurred approved child care expenses in the 2007 income year, you will not have to wait until next year. The amount of Child Care Tax Rebate that you are entitled to for 2007 will be received as a direct payment from the Family Assistance Office after September, 2007 following the lodgement of your 2007 tax return. The rebate for 2007 is limited to $4211 per child.

What is the Baby Bonus?

The aim of this was to assist families with children with the cost of raising children. This refund pays back to mothers the tax paid on the income in the year prior to the birth of their child.
The bonus is available to families, who had a baby or gained legal responsibility of a child after 30 June, 2001 and before 1 July, 2004. It has since been replaced with a Maternity payment for families having a baby or adopting a child. The Maternity payment can only be claimed directly from the Family Assistance Office.

The main elements of the Baby Bonus

• can only be claimed through the Tax Office
• can only be claimed for the first child born in the period 1 July, 2001 to 30 June, 2004
• available until that child turns 5 years of age
• paid as a refundable tax offset up to a maximum of $2500 per annum