Education tax refund

NOTE: Education Tax Refund replaced by SchoolKids Bonus
Announced in the Federal Budget 2012; around a million families will receive a cash hand-out of $820 for every high-school child and $410 for every primary school child as part of the new SchoolKids Bonus, paid directly to eligible recipients.

The new SchoolKids Bonus replaces the Education Tax Refund (ETR) from January 1, 2013, and under this new scheme, payments will be made upfront with no paperwork required. It will especially benefit families that would not have had the cash to buy the products upfront in the first place. Under the Education Tax refund, 1 million families — that is 80% of eligible families — were not claiming what they were entitled to.

As part of the transition to the new SchoolKids Bonus, the full ETR entitlement for 2011-12 will be paid out in full to all eligible families as a lump sum payment in June this year. The SchoolKids Bonus will replace the ETR from January 1, 2013 and will be paid to coincide with the start of Term 1 and Term 3.

Approximately 1.3 million low-income families who qualify for Family Tax Benefit A will be eligible for the means-tested payments, offered to families earning less than $101,000 if they have one primary-school aged child, rising to $123,000 for families with two high-school aged children.

A tax refund to help meet education costs

Hands up who hasn't heard of the education tax refund?

There must be quite a few of you who weren't listening, because the Tax Office says that there are still eligible parents or guardians who have not claimed the refund. The projected pool of $1.02 billion earmarked to be claimed back still has hundreds of millions waiting to be claimed, and that could be taking some of the pressure off family budgets. (But please see note at the end of this page).

The education tax refund was introduced in 2008, and is designed to cover primary and secondary school children, and the government said at the time that in the first year it expected the refund to help more than 1.3 million families. So if you've been living under a rock and haven't heard about this tax break, start saving your receipts so you can claim for this tax year's schooling costs.

It's well worth the very minor effort, as you can get back 50% on some education expenses. Items covered include computers, software, internet connection, textbooks and stationery – and even prescribed trade tools for secondary school trade courses. (You could even get a shiny new iPad ... see details here.)

There is a limit of course – $794 for each child in primary school, and $1,588 for each at secondary school (that is, a refund of 50%, so $397 and $794 respectively). There's also an education tax refund calculator (click to start a 'new session').

But it's not a free-for-all. To get the refund, you must meet the eligibility criteria.

Many people with school kids are eligible already as they probably receive the family tax benefit part A. But even so, while there are some payments that prevent you from receiving the family tax benefit, like the youth allowance or a disability pension, you can still get the education refund.

The refund is to be claimed in your income tax return, however if you are is not required to lodge an income tax return, a claim for the refund can be made by completing the Education Tax Refund for Individuals claim form, which is available, with instructions, on the Tax Office website. The form is required to be lodged by October 31.

You can claim the education refund every year while the kids are still at school, or if you are an independent student aged under 25 and in primary or secondary school. There are some expenses that are ruled out – like school fees and uniforms (although uniforms are okay after July 1, 2011, including sports uniforms), musical instruments, sports equipment, tuck shop costs, excursions and school photos.

Ready to claim? You can find out more here.
Haven't been paying attention? Go to the office!.