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Figures from the Australian Taxation Office (ATO) have revealed that only half of all eligible Australian families have lodged a claim, leaving more than $500 million in unclaimed benefits.

The Government is encouraging Australian families to keep their receipts from education related expenses so they can take advantage of the Education Tax Refund (ETR).

The Government introduced the $4.4 billion Education Tax Refund to take some of that pressure off family budgets but the take up has been far less than anticipated.

The Education Tax Refund provides  up to $375 per primary school student and $750 per secondary school student.

That means a family with two kids in high school and one in primary school could potentially get a refund of almost $2000 on eligible education expenses.
 
According to the ATO, as at 13 November 2009, 794,720 claims for the Education Tax Refund have been processed for 1,375,167 children of an estimated 2,669,000 eligible children.

Of the 1,375,167 eligible children, approximately 740,000 are primary school children and 635,000 are secondary school children.

Only $488 million of the projected $1.02 billion cost has been claimed in tax refunds.

Of the 794,720 ETR claims processed, 259,150 claims (32.6 per cent) were for the maximum entitlement and 535,570 claims (67.4 per cent) were for a proportion of the maximum entitlement.

The average amount claimed for primary school students was $246.99 while the average for secondary school students is $495.73.

Back to school expenses that parents can claim include the cost of buying, establishing, repairing and maintaining any of the following items:

• school textbooks and other printed learning material, including prescribed textbooks, associated learning materials, study guides and stationery;
• prescribed trade tools for secondary school trade courses;
• laptop computers and home computers;
• computer-related equipment such as printers, USB flash drives, as well as disability aids to assist in the use of computer equipment for students with special needs;
• home internet connections; and
• computer software for educational use.

Families can claim the ETR if they have eligible education expenses and received Family Tax Benefit (FTB) Part A for the child that the expenses relate to.

Families are also eligible if they have children in primary or secondary school who would be eligible for FTB Part A purposes, but for the fact that the child receives certain payments or allowances, including:

• Youth Allowance;
• Disability Support Pension;
• ABSTUDY Living Allowance;
• the Veterans’ Children Education Scheme;
• Student Financial Supplement Scheme; and
• the scheme to provide education and training under s258 of the Military Rehabilitation and Compensation Act 2004.

Taxpayers still have until March-April 2010 to claim out of pocket education expenses for the 2009 school year, if they lodge their individual tax returns through a tax agent.

  More information about the Education Tax Refund is available at: www.educationtaxrefund.gov.au

On 1 April 2009, the Federal Court handed down its decision in Symone Anstis v. Federal Commissioner of Taxation.
Ryan J. held that Ms Anstis, who received a youth allowance as a
university student, was entitled to a tax deduction for her education
expenses.

The Commissioner has lodged an appeal against the decision. Until
this matter is resolved, the Tax Office will continue to apply the view
set out in Income Tax Ruling TR 98/9. That is, education expenses are not deductible against various Commonwealth educational assistance schemes.

The treasurer has reminded parents of school aged children of the importance of keeping the receipts needed to claim the Education Tax Refund in their tax returns of 2009 and subsequent years.

The Education Tax Refund will provide parents with for education expenses, with refunds of up to:

• $375 per primary school student; and
• $750 per secondary school student.

How much can you claim?

By keeping their receipts, eligible families will be able to claim a 50 per cent refund every year for key education expenses up to:

• $750 for each child undertaking primary studies (maximum refund of $375 per child, per year); and
• $1,500 for each child undertaking secondary studies (maximum refund of $750 per child, per year).

Where a family has educational costs in excess of the refund limit, these costs can be carried over to the next financial year.

What items are covered?

Eligible expenses for the Education Tax Refund include:

• laptops;
• home computers and associated costs;
• home internet connections;
• printers;
• education software;
• trade tools for use at school;
• school text books; and
• stationery.

Who is eligible?

Parents entitled to Family Tax Benefit (FTB) Part A for children in primary or secondary school for the relevant financial year are eligible for the Education Tax Refund.

Parents are also eligible if they have children in primary or secondary school who would be eligible children for FTB Part A purposes, but for the fact that the child receives certain payments or allowances, for example:

• Youth Allowance;
• Disability Support Pension; and
• ABSTUDY Living Allowance.

How do you claim the Education Tax Refund?

Parents will then be able to claim 50 per cent of these expenses through their tax return at the end of the financial year. For those who are not required to complete an income tax return, a separate form will be available from the Australian Taxation Office.

Taken from the treasurers press release.

Now that the election is over, it is probably worthwhile to summarise what was promised in respect of tax changes.

The major tax promises made included:

* significant cuts in personal tax rates for those individuals whose taxable income is less than $180,000 by the year ended 30 June 2011. Labor also has an ‘aspirational goal’ to further reduce rates by the year ended 30 June 2014 so that there will only be a three tiered scale of marginal tax rates

* the introduction of a 50 per cent education refund for the costs of laptops, personal computers, software and internet costs used by students. The refund will be capped at $375 and $750 respectively for eligible primary school and secondary school students, and will only be available for families who receive Family Tax Benefit A

* an increase in the child care rebate from 30 per cent to 50 per cent on out of pocket child care costs which will be paid every 3 months rather than annually. The maximum rebate available will be lifted to $7500 annually per child

* the introduction of housing affordability credits and the introduction of a first home saver account scheme