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Edited version of your private ruling
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Ruling
Subject: Income - other - excepted person
Question
Are you an 'excepted person' for the purposes of Division 6AA of the Income Tax Assessment Act 1936 (ITAA 1936)?
Answer
No
This ruling applies for the following period:
Year ended 30 June 2012
The scheme commences on:
01 July 2011
Relevant facts and circumstances
You are a minor.
You have provided a medical certificate from a qualified medical practitioner certifying that you suffer from a physical disability and are likely to suffer from it for an extended period of time.
You do not receive carer allowance or a disability support pension.
Relevant legislative provisions
Income Tax Assessment Act 1936 Division 6AA
Income Tax Assessment Act 1936 subsection 102AC(2)
Social Security Act 1991 Part 2.19
Reasons for decision
Division 6AA of the ITAA 1936 provides that special rates of tax and a lower tax free threshold apply in determining the basic income tax liability on certain assessable income derived by a prescribed person.
Subsection 102AC(2) of the ITAA 1936 states that a 'prescribed person' includes any person, other than an excepted person, under 18 years of age at the end of the income year.
This section also defines an 'excepted person' and provides that it includes a person in respect of whom the Commissioner has received a certificate issued by a legally qualified medical practitioner certifying that they are a disabled child, or a disabled adult, within the meaning of part 2.19 of the Social Security Act 1991.
The phrase 'within the meaning' is not defined within income tax legislation or case law; as such, it will take on its ordinary meaning.
The Macquarie Dictionary, 2nd Revised Edition, defines 'within' as in the limits, not beyond and 'meaning' as that which is intended to be, or actually is, expressed or indicated.
As such, we are required to examine all of part 2.19 of the Social Security Act 1991 to determine the intention of this legislation and in doing so identify the conditions that must be met for a minor to be considered a 'disabled child' under this Act.
Part 2.19 of the Social Security Act 1991 is the legislation for carer allowance. The term 'disabled child' is defined in section 952 of this Act and states that it includes a person aged under 16 who has a physical, intellectual or psychiatric disability; and is likely to suffer from that disability permanently or for an extended period of time.
Section 953 of the Social Security Act 1991 provides the conditions that must be met in order to qualify for a carer allowance. One of these conditions is that either of the following must apply:
· The disability from which the care receiver is suffering is declared, under subsection 38E(3), to be a recognised disability for the purposes of this section; or
· The person has been given a qualifying rating of intense under the disability care load assessment (child) determination for the care receiver.
After careful examination of part 2.19 of the Social Security Act 1991, it is evident that the intention of this legislation is to determine whether a person is eligible for a carer allowance.
Accordingly, a minor will be considered a 'disabled child' within the meaning of part 2.19 of the Social Security Act 1991 if:
· they have a physical, intellectual or psychiatric disability;
· they need care and attention from another person on a daily basis to an extent substantially greater than that needed by a person of the same age who does not have such a disability; and
· the person is likely to need care and attention permanently or for an extended period of time.
In your case, we accept that you suffer from a condition and that you are likely to suffer from it for an extended period of time. However, this condition is not listed as a recognised disability for carer allowance and as you have never applied for a carer allowance you do not have a carer rating.
Therefore, you do not satisfy the conditions necessary to be considered a 'disabled child' within the meaning of part 2.19 of the Social Security Act 1991. Accordingly, you are not an excepted person for the purposes of Division 6AA of the ITAA 1936.
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