Australian working families are set to benefit from the Rudd Government’s decision to create a new Education Tax Refund, to help with the costs of education.

About 1.3 million families (with 2.7 million students) will be eligible for the refund tax offset which is expected to benefit Australian families by more than $1 billion a year.

Eligible families will be able to claim a 50 per cent refund every year for key education expenses up to:

• $750 for each child undertaking primary studies

(maximum refundable tax offset of $375 per child, per year)

• $1500 for each child undertaking secondary studies
  (maximum refundable tax offset of $750 per child, per year).

Families receiving Family Tax Benefit (Part A) with children undertaking primary or secondary studies or whose school children receive Youth Allowance or another relevant payment (see Attachment) will be eligible for the Education Tax Refund.

The refundable tax offset will apply to expenses incurred from 1 July 2008 and will be claimed upon lodgement of a 2008–09 income tax return.

Eligible families will be able to recoup the cost of purchases including:

• laptops;
• home computers and associated costs;
• home internet connection;
• printers;
• education software;
• trade tools for use at school;
• school text books; and
• stationery.

Eligible expenses are for items that support a child during school and improve the quality of education.

Parents will then be able to claim 50 per cent of these expenses through their tax return at the end of the financial year.

Together with other measures in A Tax Plan for Australia’s Future, the Education Tax Refund will ease cost of living pressures for families and is another step towards creating a world-class school education system.