Changes to the Education Tax Refund - Information for Schools
The Australian Government recently expanded the Education Tax Refund (ETR) - which helps families meet the cost of primary and secondary education - to include school uniforms.
Schools should be aware that they may be asked by parents to provide evidence of amounts paid to them by, or for, their students.
What is the ETR and how has it changed?
The ETR allows eligible parents, carers, legal guardians and independent students to claim a refund each year of up to 50% of eligible education expenses up to certain maximum amounts.
By virtue of the recent expansion of the ETR, school-approved uniforms purchased from 1 July 2011 may be claimed from 1 July 2012. To be eligible for claiming, uniforms need to be distinctive and recognised by the school but are not limited to items displaying the school crest.
What are"eligible education expenses"?"Eligible education expenses" are items that support a student's primary or secondary school education. They include the purchase, lease, hire or hire-purchase cost, repairs and running costs of eligible items.
Example of eligible education expenses include:
- Laptops, desktop computers and printers
- Stationery, text books, exercise books and reference books such as dictionaries and encyclopaedias
- Internet connections, computer software for educational use and USB flash drives
- Prescribed trade tools required to complete a school-based apprenticeship
- Uniforms - including hats, footwear and sports uniforms - approved by a school as its uniform
What do schools need to know?
For families to be able to claim the ETR, a school statement or receipt should list eligible education expenses separately to non-eligible fees and expenses. School fees are not an eligible education expense. So, when a school issues a statement or receipt for school fees which includes eligible educational expenses such as the cost of text books, parents will be able to claim that part of the school fee attributable to the eligible items if those items are itemised or listed separately on the statement or receipt. A school can assist parents by breaking down the statement or receipt to show the apportionment of expenses instead of issuing a"lump sum" statement or receipt for school fees and expenses.
Otherwise, a school may provide a separate notice in writing - either at the time the statement or receipt is issued or at a later date - advising of the amount that relates to eligible items. This written notice will be evidence enough for a parent making an ETR claim for those items.
Schools should keep a record of how any apportionment is made to assist with any queries. However, as it is not the school's responsibility to specify what is and is not an eligible education expense, schools should be aware that they cannot be questioned by the ATO as to how they determined whether specific expenses are eligible. The onus is on the parent to identify what is an eligible education expense.
The Australian Government ETR website at www.educationtaxrefund.gov.au is a very useful resource for families and schools to provide further information in relation to the ETR. The website provides a helpful Fact Sheet and an A3 poster which schools may distribute or display to assist eligible families in claiming all that they are entitled to.