ATO ID 2002/222: Exemption of summer vacation scholarship income - meaning of full-time student
Date of decision: 13 February 2002
Business line: Small Business/Individual Taxpayers

Issue
Is a part-time summer vacation scholarship received by a student who is undertaking a full-time undergraduate course exempt from tax under section 51-10 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Decision
Yes. A student who is undertaking a full-time undergraduate course is a full-time student during the period they are in receipt of a summer vacation scholarship. The part-time summer vacation scholarship is exempt from tax under section 51-10 of the ITAA 1997.

Facts
The taxpayer, who is undertaking a full-time undergraduate course at a university, was awarded a summer vacation scholarship by the university to enrol in the university's summer vacation program. For the purpose of determining the fees applicable, the taxpayer's enrolment constituted a part-time academic summer program. The part-time summer vacation scholarship is principally for educational purposes.

Reasons for decision
Summary: Section 51-10 of the ITAA 1997 exempts from tax income received by a full-time student at a school, college or university from a scholarship, bursary educational allowance or educational assistance. As the taxpayer is undertaking a full-time undergraduate course, they meet the requirement of section 51-10 of the ITAA 1997 that they be a full-time student. The fact that the program for which the taxpayer was provided the scholarship was undertaken while on university vacation does not alter their status as a full-time student. Nor is this status altered by the fact that the taxpayer's summer vacation enrolment may have constituted a part-time academic summer program.

Legislative references: Income Tax Assessment Act 1997 section 51-10
Related ATO interpretative decisions: ATO ID 2002/220 | ATO ID 2002/221
Subject references: Exempt income Scholarships, fellowships & bursaries