As the media is reporting, the High Court has today ruled in favour of Symone Anstis in her claim to deduct from her taxable income expenses incurred in maintaining eligibility for Youth Allowance.
We have discussed this issue before.
My view on the substantive policy issues remains unchanged. The legal principle established by this case, that welfare recipients can claim as deductions expenses incurred to maintain their eligibility for their welfare payment, should be overturned by statute.
Ms Anstis claimed computer depreciation, textbooks, a student administration fee, and supplies for children taught during her teaching rounds. What claims would be allowed to maintain continuing unemployability or disability?
The expense to government of this decision may not be massive. Under the low-income tax offset many if not most welfare recipients won’t pay tax anyway. But the principle of no tax deductions for welfare eligibility should be established in law.
12/11: The Australian is reporting that
The decision …. overturns a long-standing ATO policy that self-education expenses to obtain a first qualification are not tax deductible…
This is incorrect. The deductions are not for self-education as such; they are for maintaining YA eligibility. People who don’t get YA can’t claim deductions.