Understanding Benefits: Pensioner Education Supplement

The Pensioner Education Supplement is a fortnightly payment designed to assist people to improve their chances of finding a job through study.

Who can get it?

You may qualify for the Pensioner Education Supplement if you are studying and receiving a certain Centrelink payments such as parenting payment (single), carer payment, disability support pension, widow pension, or sole parent on special benefit.

How much study do I need to do?

To receive Pensioner Education Supplement, you must be enrolled in and undertaking an approved course of secondary or tertiary study.

To qualify for the part rate of payment (that is the payment you would receive if you were considered to be a part-time student) you must be undertaking at least 25 per cent of the normal full-time study load for your course.

To receive the full rate of payment (that is the payment you would receive if you were considered a full-time student) you must be studying full-time—that is, at least 75 per cent of the full-time study load or qualify for the 66 per cent study load concession.

How much is it?

Pensioner Education Supplement is paid at two rates. How much you receive depends on your study load and the payment you are on from Centrelink or Veterans Affairs. The maximum payment rate is $62.40 per fortnight or $31.20 at the part-time rate.

You may also be able to receive an Education Entry Payment. This is a one-off payment of $208 to help you with the up-front costs of taking up study.

Pensioner Education Supplement is NOT taxed and is paid over holidays so long as you continue with your studies.

How do I get it?

When you claim Pensioner Education Supplement, you will need to show Centrelink proof from the institution where you are going to study that you are enrolled as a student such as your student number, the name and details of your course, etc. Usually you will get paid when your studies start. Your claim must be lodged:

- before 31 March (for semester one) for full-year study, or
- before 31 July (for semester two) for full-year study, or
- within four weeks of either commencing study or otherwise becoming qualified for Pensioner Education Supplement.

To find out more or to apply for the Pensioner Education Supplement you should contact yor local Centrelink office. After you first contact Centrelink, you usually have 14 days to put in your claim.

7 Tips to Help Your Kids Manage Money

Teaching your kids how to manage their money is an important skill that will help them through life.

Children need to understand that money is a limited resource and does not simply "grow on trees" or materialise from holes in the wall.

FIDO has compiled a list of 7 tips for parents to help their kids manage money and start their financial lives with good habits.

1. Encourage them to think about what they want, what they need, and to identify their savings goals.

2. Help them decide what they really want, and to focus on their most important goals.

3. Remind them to regularly set aside a specific amount of their pocket money towards the items they are saving for.

4. Help them to control impulse buying by reminding them of their savings goals when they get tempted to buy things that aren’t on the list.

5. Encourage them to put loose change into a savings jar at the end of each day and to use this little pot of ready cash to cover small personal expenses.

6. Tell them about lay-by and encourage them to use this an alternative to credit.

7. Use pre-paid cards for your children’s mobile phones and make your kids top up the card themselves if they spend them too fast.

So, what exactly is a "tax offset"?

A tax offset is different to a tax deduction. You'll remember from a previous post I explained how a tax deduction is taken off your income before tax is calculated.

With tax offsets (previously known as rebates), the offset is taken off the amount of tax you have to pay.

The ATO has identified three types of tax offsets – those that:

• provide tax relief for personal circumstances – for example, offsets for senior Australians and people living in remote areas.


• give you a credit for an amount of tax that has effectively already been paid – such as credits for franked dividends and foreign tax, and


• provide an incentive – for example, the tax offset for mature age workers and the private health insurance rebate.

In most cases an offset can only reduce the amount you have to pay to zero. If your offsets total more than your tax payable, you typically don't get a refund for the difference. Offsets which do provide a refund are the private health insurance rebate, franking tax offset and the baby bonus.

Alan provides a more detailed explanation and list of tax offsets available in his post at Dollars & Sense for Small Business.

Q & A: Can I claim my TAFE fees?

I was asked earlier today a question I often hear: Can I claim my TAFE fees as a tax deduction? The answer really depends on your individual situation.

You can claim self-education expenses only if they are directly related to your CURRENT employment (such as a secretary taking a Business Administration certificate).

Typically, the person asking is attending TAFE in order to change careers or get back into the workforce. Unfortunately both of these circumstances would not allow them to claim a deduction for their TAFE fees.

Beware: Common errors in rental property claims

The ATO has stated it will continue to closely scrutinise rental property expense claims for the 2007 income year.

Some of the areas of concern identified by the ATO in recent compliance activities include:

- Claiming deductions during a period where the property is not genuinely available for rent;

- Claiming full deductions when the property was available for rent only part of the year.

- Claiming initial repair and or renovation costs as repair and maintenance costs (these should be attributed to the base cost of the property under the CGT rules);

- Incorrectly allocating deductions related to private borrowings or travel; and

- Incorrectly claiming deductions for legal expenses for things such as costs associated with buying and selling a property or defending title.

I'll be detailing some of these issues in more detail in future posts.

SOURCE: National Tax and Accountants' Association Tax Schools Seminar 2007

Forgotten Tax Deduction: Income Protection

While life insurance is not tax deductible, income protection insurance is.

Payments are typically made monthly on these policies but can usually be paid up to a year in advance.

June is a great time to maximise your tax deductions. If you pay your annual premium now as a lump sum, you can then claim a tax deduction for the full amount in this years tax return.

Family Tax Benefit A Supplement

I've received a few queries recently about the Family Tax Benefit Supplement. It is coming to that time of year again when families begin to anticipate this payment and are wondering just how much it will be and when it will be paid.

What is it?
The Family Tax Benefit Part A Supplement is an increase in the annual rate of Family Tax Benefit Part A to be paid as a lump sum after the end of the financial year.

How much?
For the 2006-07 financial year, the payment will amount to $646.05 per child. If you have a child for part of the year or share care, the amount will be proportional to the period or percentage of care.

Who is eligible?
The Supplement is available to all Family Tax Benefit Part A eligible families. Please note that if an overpayment has occurred during the year, the Supplement will be used first to offset outstanding overpayments.

When will it be paid?
Families will be paid the Supplement after family tax returns have been lodged and FTB payments have been balanced for the for the financial year. If you or your partner are not required to lodge a tax return, be sure to notify the Family Assistance Office of this so as not to delay payment.