Taxation Determination

TD 92/154

Income tax: are childcare expenses paid by a person for that person's children deductible under subsection 51(1) of the Income Tax Assessment Act 1936?

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FOI status:

may be releasedFOI number: I 1213244

This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953, is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, the Determination applies to transactions entered into both before and after its date of issue.

1. No. Subsection 51(1) permits deductions for losses and outgoings incurred in gaining or producing assessable income except where they are capital, private or domestic in nature.

2. The High Court held in Lodge v FC of T (1972) 128 CLR 171; 72 ATC 4174; 46 ALJR 575; 3 ATR 254; that child care expenditure was neither relevant nor incidental to gaining or producing assessable income, and therefore not deductible. The expenditure was also of a private or domestic nature.

3. This view has been consistently affirmed in later court decisions, most recently by the Full Federal Court in 1991 in Jayatilake v FC of T 91 ATC 4516; 22 ATR 125; 101 ALR 11.

4. The same principle applies whether the expenses are paid to a registered organisation or to any other person for this purpose.

5. In this context childcare expenditure includes fees paid, travel expenses, cost of child's lunch etc.

Commissioner of Taxation


ATO references:
NO PNR T95 Pt9

ISSN 1038 - 3158

Subject References:
childcare expenses

Legislative References:
ITAA 51(1)

Case References:
Lodge v FC of T
(1972) 128 CLR 171
72 ATC 4174
46 ALJR 575
3 ATR 254

Jayatilake v FC of T
91 ATC 4516
22ATR 125
101 ALR 11

TD 92/154 history
  Date: Version: Change:
You are here 10 September 1992 Original ruling  
  5 August 1998 Withdrawn