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You are here: ABSTUDY > 6
Income and Rates > 6.9 Negative Gearing/Net Passive Business Losses
The partner and parental income tests include the value of income losses claimed by individuals. This type of taxation deduction is often referred to as "negative gearing".
These deductions are to be self-declared at the time of application, by the student’s parent/s or partner as applicable.
This chapter details which losses (negative gearing) are to be included in the income tests
A parent or partner who reduces their taxable income by claiming a loss against rental property owned in their own name will have to add back the value of the rental property deduction (commonly known as negative gearing) for ABSTUDY purposes. Rental property losses flowing through to the individual parent or partner from rental property owned in a partnership, trust or company are not taken into account for the ABSTUDY income test.
Any substantial changes in taxable income deductions from rental property losses (negative gearing), may warrant reassessment because of the effect on current or reverse current income
"Rental property" owned by an individual person includes:
A parent or partner who reduces their taxable income by claiming losses against any non-property investments, eg share portfolios, owned in their own name must add back the value of that deduction.
Items for which losses may be claimed against taxable income include:
Only the amount allowed as a taxable income deduction claimed by the individual relevant taxpayer (ie parent or partner) will be added to their income.
For example: A relevant person’s taxable income may be reduced by $4,000 in claimable rental property losses, although other, non-claimable losses amounted to a further $3,000. Only the amount of $4,000 will be added to that person’s income for ABSTUDY purposes.
The partner or parent is required to self-declare on the ABSTUDY claim form, the net amount of negative gearing claimed against other taxable income in their individual or partnership income tax return.
The claim forms provide a box in the income section for self declaration by the partner or parent of the net amount of negative gearing claimed against other taxable income in his/her individual or partnership income tax return.
Centrelink’s Debt Management Unit will conduct compliance checks with the Australian Taxation Office (ATO).
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