Private ruling: Education tax refund
Published: December 2011
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Do aprons qualify as an eligible education expense for the purposes of the education tax refund (ETR)? | A1:  | Q2: Does a novel for your child's English class qualify as an eligible education expense for the purposes of the ETR? | A2: 

Relevant facts and circumstances: Your child attends high school. Your child undertook a woodwork class and food technology class. Both classes require your child to have an apron. Both subjects were mandatory of the high school and did not require attendance at a TAFE to complete. Your child must read a novel as a requirement of his English class.

Relevant legislative provisions: Income Tax Assessment 1997 Ch2-Pt2-20-Div61-SDiv61-M | Income Tax Assessment 1997 Section 61-640.

Reasons for decision: Summary: The ETR is a government initiative to help with the cost of educating primary and secondary school children. Eligible parents, carers, legal guardians and independent students may be entitled to a refundable tax offset equal to 50% of eligible education expenses up to a set limit: subdivision 61-M of the Income Tax Assessment Act 1997 (ITAA 1997). For the purposes of the ETR eligible education expenses are items that support a child's schooling and education covering the purchase, lease, hire or hire-purchase cost of (section 61-640 of the ITAA 1997): o laptops, home computers and associated costs; o computer-related equipment such as printers, USB flash drives as well as disability aids to assist the use of computer equipment for students with special needs; o home internet connection, including the costs of establishing and maintaining; o computer software for educational use, word processing, spreadsheet, database and presentation software and internet filters and antivirus software; o school textbooks, other paper-based school learning materials including prescribed textbooks, associated learning materials, study guides and stationery; and o a tool of trade. In your case, you have purchased aprons for your child's woodwork class and food technology class. The apron would need to be a tool of trade to be considered an eligible education expense. What constitutes a tool of trade is not defined within the provisions and would therefore largely take on its ordinary meaning: an instrument of manual operation (tool) commonly used in a specific occupation. The definition, therefore, has two elements, the instrument (tool) and the occupation (trade), and it is considered both elements need to be present for the acquisition costs to be an eligible expense for ETR purposes. Thus the cost of tools as part of an elective subject such as woodwork would not necessarily qualify as an eligible expense. The tools would need to be acquired as part of a vocational training subject aimed at developing occupational/trade skills. Your child did not complete a vocational training course and the aprons are not a tool of trade relevant to this occupational/trade. Therefore the aprons are not considered to be an eligible education expense for the purposes of the ETR. You purchased a novel that was used in connection with your child's English class. This item is an eligible education expense for the purposes of the ETR as it is a textbook or other paper-based school learning material. Provided you have kept receipts you can claim the textbooks you purchased for your child's English class.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.