Private ruling: Deductions - other
Published: November 2011
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to claim a deduction for the expense you incurred in actively seeking paid employment when you were in receipt of the Newstart allowance? | A1: Yes.

Relevant facts and circumstances: You are an Australian resident for taxation purposes. You were a job seeker receiving Newstart allowance during the 2010-11 financial year. You have included the allowance as income in your 2010-11 income tax return. As part of your Employment Pathway Plan you applied for a position and were successful in obtaining a job interview. As part of the application process you incurred expenses.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature. In Federal Commissioner of Taxation v. Anstis 2010 ATC 20-221; 76 ATR 735 the high court recognised that Youth Allowance payments are ordinary income in the hands of recipients. The Commissioner has accepted the strict interpretation of this case in that recipients of Youth Allowance or Newstart Allowance, who have to satisfy an activity test to qualify for their payment can claim certain expenses incurred as a deduction. In your case it is accepted that the expense you incurred resulted from you actively seeking paid employment and meeting the requirements of your Employment Pathway Plan. It is considered that you are entitled to a deduction for the expense.

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