Radical Reform in the High Court: Youth Allowance

In a move that sent Australian legislatures reeling, the High Court handed down three rather controversial decisions on Thursday, 11th November 2010, which were reported in the media. The three cases declared invalid or altered the interpretation of several key provisions in laws that have been making headlines over the recent months.

The final case handed down revolved around the Social Security Act 1991 and the Income Tax Assessment Act 1997. In Commissioner of Taxation v Anstis, the Court ruled that youth allowance under the Social Security Act were to be classed as income for the purposes of a tax return. Further, at [38] of the majority Judgment, their Honours held “that expenses occasioned by [Ms Anstis’] enrolment, full-time study and satisfactory progress in that degree were incurred by [Ms Anstis] as a recipient of youth allowance. The outgoings did not lose their connection with the “position” she held as a recipient of youth allowance simply because she might have been studying for reasons other than enjoying an entitlement to youth allowance.”

Effectively, this decision says that a University student who receives youth allowance is able to claim as deductibles such resources as stationary, computers and textbooks. (Note that we are not able to give financial advice, this is not to be taken as financial advice and should you wish to see how this affects you we strongly encourage you to discuss the matter with your accountant or financial adviser).

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