Scholarship plans are a type of an investment bond which allow for anyone to set aside funds to pay for a child’s education.
Scholarship plans can help families pay for much more than just education. They can also assist with funding technology for students (e.g. computers and tablets), participation in sport (e.g. competition or subscription fees, uniforms) and cultural pursuits (e.g. musical instruments, music lessons).
Adults pursuing tertiary or skills-based qualifications can also benefit from investment in scholarship plans.
The advantage of scholarship plans is this type of investment bond receives concessional tax treatment in the form of a rebate on the 30 per cent tax paid at the fund level, as specified in the Income Tax Assessment Act.
Under tax law, scholarship plans can only be established by a friendly society which is regulated under the Life Insurance Act.
The FSA is a strong supporter of measures which encourage higher levels of investment in scholarship plans.
FSA members who offer scholarship plans are: