18 Jul 2016

Tax rebates for school donations going unclaimed

4:59 pm on 18 July 2016

At least $15 million in tax rebates from school donations is going unclaimed by parents every year, a tax expert says.

Under tax law, Inland Revenue Department (IRD) can reimburse 33 percent of the donations many schools ask parents for at the start of the year.

A bundle of New Zealand money.

A bundle of New Zealand money. Photo: RNZ / Alexander Robertson

But Michael Gousmett said a comparison of IRD and Ministry of Education data showed $46m worth of donations had not been claimed.

He told Nine to Noon many parents may not know they can claim a rebate.

"I did a lot of research looking at various schools, Googling and so on, trying to find schools that are saying 'you can claim a donation', and I found very, very few that actually have anything that informs parents. At least the Ministry of Education is trying to inform people, but I don't think the message is getting through.

"My argument is if people actually claim those tax credits then the government would get a very clear signal of just how much it was costing to educate our children in New Zealand given we supposedly have a free education system."

The amount of unclaimed rebates could be even higher than $15m, as some schools' donation figures were missing from the ministry data, Mr Gousmett said.

"I will be writing to the ministry asking why schools' accounts aren't available, but why, in the data I was provided with, are so many schools [reporting] zero donations, yet I know for a fact they do receive donations, so the interpretation of the data by the ministry unfortunately is flawed and we do need to get to the bottom of that.

Secondary Principals Council chairman Allan Vester said the figures showed how much money schools were having to ask parents for.

Some schools were asking parents for donations of up to $1000 per student.

"The donation at the top end in some schools is greater than the highest level of decile payment that's been made."

A government review of the decile funding system is making progress, but nothing has been decided yet, Mr Vester said.