Private ruling: Self-education expenses
Published: September 2014
Ruling period: Year ended 30 June 2014 | Year ended 30 June 2015
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to a deduction for self-education expenses relating to a specific educational care course (the course)? | A1: Yes.

Relevant facts and circumstances: You are a youth worker who works with children in out of home care. Often when a child has suffered trauma, the child has some intellectual disability and often the child's mental age is younger than their actual age. You contend that the courses help you with the children in out of home care, as the framework is based on trustful and reciprocal relationship with the child, positive behaviour management, working to the child's interest, programming, and finding activities and experiences that the child will find appealing. It also works along the guide of the child feeling a sense of belonging, being and becoming. You work with the children to get them feeling a sense of belonging to their environment, community and to each other. Further you work with the children to enable them to learn to regulate their own emotions, and to give words and meanings to these emotions. You believe that the skills that you learn in your course enable you to be a much better youth worker. The course description states that it is designed for people who want to work as an early childhood educator in a centre-based service or family day care, planning, implementing and managing programs in early childhood education and care services. It also states that the course will lead to possible career opportunities such as children's advisor, early childhood educator, child development educator and special needs/inclusive educator.

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 (ITAA 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, or relate to the earning of exempt income. Taxation Ruling TR 98/9 discusses the circumstances under which self-education expenses are allowable as a deduction. A deduction is allowable for self-education expenses if a taxpayer's current income earning activities are based on the exercise of a skill or some specific knowledge and the subject of the self-education enables the taxpayer to maintain or improve that skill or knowledge ( Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60, (1961) 12 ATD 348). In your case, it is accepted that the course maintained or enhanced the skills that were required in the performance of your employment duties at the time the course was undertaken. Consequently the self-education expenses incurred have the necessary and relevant connection with the earning of your assessable income and are therefore deductible under section 8-1 of the ITAA 1997. Limit to the deductibility of self-education expenses In certain circumstances you may have to reduce your allowable self-education expenses by $250. However you may have other types of expenses some of which are not allowable as a deduction that can be offset against the $250 before you reduce the amount you can claim for allowable expenses. Further information on how to work out your self-education expenses is provided in our publication, Individual tax return instructions 2014 and paragraphs 119 to 155 of TR 98/9. This publication and ruling can be accessed by visiting our website at www.ato.gov.au.