Private ruling: Income - scholarship
Published: September 2013
Ruling period: Financial year ended 30 June 2010 | Financial year ended 30 June 2011 | Financial year ended 30 June 2012 | Financial year ended 30 June 2013 | Financial year ended 30 June 2014 | Financial year ended 30 June 2015
Date scheme commenced: 1 July 2007

Ruling: Q1: Is the scholarship you receive assessable income for the years you were a part time student? | A1: Yes.

Relevant facts and circumstances: You were awarded a scholarship that enabled you to access university education at the undergraduate level. You are undertaking an undergraduate degree at university. There are two conditions of the scholarship, being that the scholarship recipient is to maintain a full-time study load and a course weighted average of 50%. In special circumstances, the university may allow a recipient to maintain a part-time study load and maintain their scholarship. The scholarship pays cash into the recipient's bank account at the beginning of each semester, after census date, in proportion to the number of credit points the recipient is enrolled in. The university funds the scholarship. A full-time study load is 75 credit points or more.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 6-5(2) | Income Tax Assessment Act 1997 section 51-10

Reasons for decision: Summary: Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year. Money received from a scholarship is generally considered ordinary income. If an amount is exempt income it is not included in the assessable income of a taxpayer. Section 51-10 of the ITAA 1997 provides that income received by way of a scholarship, bursary, educational allowance or education assistance by a full-time student at a school, college or university is exempt from income tax. In determining whether a taxpayer is a full time student, the Australian Taxation Office will look to what is the full time study load for the relevant course. The university considers a full-time study load for an undergraduate degree to be that of a student undertaking 75 credit points or more per semester. For the years you undertook 75 credit points per semester or more, the scholarship you receive is exempt from income tax and not your assessable income. For the years you undertook less than 75 credit points per semester, the scholarship you received is not exempt from income tax because you were a part time student. The scholarship you received is ordinary income and is to be included in your assessable income.