ATO Interpretative Decision

ATO ID 2002/570 (Withdrawn)

Income Tax

• This ATO ID is withdrawn because it contains a view in respect of a provision of the Income Tax Assessment Act 1936 that does not apply after the 2011-12 income year. Despite its withdrawal, this ATO ID continues to be a precedential ATO view in respect of decisions for income years up to, and including, the 2011-12 income year.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is the taxpayer entitled to a dependant tax offset under section 159J of the Income Tax Assessment Act 1936 (ITAA 1936) for maintaining a child-housekeeper where the child is a full time student?

Decision

No. The taxpayer is not entitled to a dependant tax offset under section 159J of the ITAA 1936 for maintaining a child-housekeeper where the child is a full time student as they are not wholly engaged in keeping house for the taxpayer.

Facts

The taxpayer was unable to do the housework as a result of an injury.

The taxpayer's child took over the housework. The taxpayer paid the child for this work.

The child was a full time student and did the housework after school and on weekends.

The taxpayer and their child are both residents of Australia.

Reasons for Decision

Subsection 159J(1) of the ITAA 1936 provides that a resident taxpayer is entitled to a tax offset where, during the income year, they contributed to the maintenance of a dependant who is also a resident of Australia.

A child-housekeeper of a taxpayer may be a dependant for the purposes of the dependant tax offset (subsection 159J(2) of the ITAA 1936).

A 'child-housekeeper' is defined in subsection 159J(6) of the ITAA 1936 as being a child of a taxpayer who is wholly engaged in keeping house for the taxpayer.

The meaning of 'wholly engaged in keeping house' was considered by the Board of Review in Case M69 80 ATC 486; (1980) 24 CTBR (NS) Case 44. It was decided in that case that a housekeeper who worked for 4 hours in the morning 5 days a week was not 'wholly engaged in keeping house'. The housekeeper must be engaged in keeping house to the exclusion of everything else.

The housekeeper must have the responsibility for, and control over, the everyday running of the house. Merely assisting with the housework is not sufficient to constitute keeping house (Case U124 87 ATC 1204; AAT Case 142 (1987) 18 ATR 4045).

As the taxpayer's child is a full time student they cannot be wholly engaged in keeping house. Therefore the taxpayer is not maintaining a dependant child-housekeeper and is not entitled to a dependant tax offset under section 159J of the ITAA 1936.

Year of income:  Year ended 30 June 2001

Legislative References:
Income Tax Assessment Act 1936
   section 159J
   subsection 159J(1)
   subsection 159J(2)
   subsection 159J(6)

Case References:
Case M69 / Case 44
   80 ATC 486
    (1980) 24 CTBR (NS) 386

Keywords
Child housekeeper rebates
Dependant rebates
Rebates

Business Line:  Small Business/Individual Taxpayers

Date of publication:  31 May 2002

ISSN: 1445-2782