Students receiving Austudy or ABSTUDY are now eligible for a $550 tax deduction for the last three years to cover study expenses.
The Australian Taxation Office (ATO) will amend tax assessments of eligible Austudy and ABSTUDY recipients to include a tax deduction for study expenses for the 2007, 2008, 2009 and 2010 income years. The rule reduces the amount of income eligible to be taxed by $550 on each year.
Tax Commissioner Michael D'Ascenzo said: "We will be writing to eligible Austudy and ABSTUDY recipients during June and advising them that they will be receiving amended tax assessments."
Eligible students do not need to do anything, the ATO said, and any amounts refunded do not need to be included in the next tax return.
Students who received Austudy and ABSTUDY payments in 2011 can claim a deduction for these expenses when they lodge their tax return, but will need to have evidence to support their claims.
The $550 deduction amount is based on information published by academic institutions of the average amounts of study expenses of $800. The law makes the first $250 not deductible.
"If the recipient has evidence to support a higher claim, they can choose to do so," Mr D'Ascenzo added.
Job seekers on Newstart or Youth Allowance will also benefit from the decision, the ATO said.
"If you are a Newstart allowance recipient or Youth Allowance job seeker, you can claim deductions for costs you incur in actively seeking paid work, provided you have written evidence of the expenses and they are not of a private or domestic nature," Mr D'Ascenzo said.
Deductible costs include travel costs to interviews, training courses, phone calls relating to job hunting and resume preparation.