What this ruling covers
The Australian Taxation Office has issued Class Ruling CR 2026/70, which confirms that payments received by eligible full-time students under the Commonwealth Teaching Scholarships Program are exempt from income tax.
About the Commonwealth Teaching Scholarships Program
The program is funded by the Australian Government at $160.1 million from 2023-24 to 2030-31. Payments are made in annual instalments of up to $10,000, with the following maximums:
- Up to $40,000 for undergraduate teaching students
- Up to $20,000 for postgraduate teaching students
The ATO's ruling on tax treatment
The ATO ruled that while these payments are ordinary income under section 6-5(1) of the Income Tax Assessment Act 1997, they are exempt from income tax under table item 2.1A of section 51-10. The exemption applies because the payments qualify as scholarship payments to full-time students for educational purposes, and none of the exclusions in section 51-35 apply.
Period covered by this ruling
This ruling applies from 1 July 2023 to 30 June 2031.
Key actions
- If you or an employee is receiving Commonwealth Teaching Scholarship payments, confirm they are not being declared as taxable income on the relevant tax return - the ATO has confirmed these payments are exempt from income tax.
- If you are a bookkeeper or tax agent preparing returns for clients who receive these scholarship payments, apply the exemption under table item 2.1A of section 51-10 of the Income Tax Assessment Act 1997.
- Read the full ruling at https://www.ato.gov.au/law/view/document?docid=CLR/CR202670/NAT/ATO/00001 to confirm your specific circumstances match the scheme described in paragraphs 8 to 25 - if your situation differs from that description, you cannot rely on this ruling.
This is a plain-English summary for information only, not legal or compliance advice. Always check the official source or consult a qualified professional.