AMSA MEDIA RELEASE: Rural Health Scholarships in ATO Firing Line
The Australian Medical Students’ Association (AMSA) rejects the proposed changes outlined in the Australian Taxation Office (ATO) discussion paper that may see existing scholarship agreements become subject to income tax.
The ATO discussion paper, Review of ATO advice on scholarships, outlines several changes that reconsider the tax exemption on current educational scholarships. The proposals have the potential to impede the Government’s recent efforts to stimulate the future rural health workforce, with many scholarship schemes designed to attract and retain future doctors to areas of workforce shortage.
The Medical Rural Bonded Scheme (MRBS) is one of the scholarships in the firing line. As part of this scheme, students sign a contract to fulfil six years of returned service in a rural and remote area at the completion of their specialty training.
President of AMSA, Rob Thomas, said: “These scholarships were designed to attract and retain future doctors to areas of workforce need to grow our rural and remote health workforce.
“MRBS participants were strongly encouraged to seek legal advice prior to signing the contract due to the severe penalties for not fulfilling the return of service obligations. Students entered the program with the understanding that the payments they received would be free from income tax.
“To change the conditions by removing the tax exemption would be hugely unfair and a dishonouring of the agreement.”
The MRBS was discontinued by the Government in 2015, with the majority of the final intake of students in their penultimate year of study.
Jenna, a final year rural clinical school student at the University of Notre Dame, and MRBS participant said: “The Government has already removed all support structures for the 421 students still participating in the MRBS, and offers limited support or flexibility to those scholars who are currently working towards their return of service. Taxation of the scholarship would add further insult to the injury, demonstrating the little regard that the Government appears to have for the students who will ultimately form the future rural workforce.”
AMSA has made a submission in response to the ATO discussion paper, calling on the government to reject the taxation of these scholarships.
Media Contact: Isabella Gosper
Phone: 0416 816 830
Published: 03 Apr 2017