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Edited version of private ruling
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Ruling
Subject: Assessability of Attendant Care Allowance
Question
Are the attendant carer payments you receive from the Commonwealth Department of Veterans' Affairs assessable income?
Answer
Yes
This ruling applies for the following period
Year ended 30 June 2010
The scheme commenced on
1 July 2009
Relevant facts and circumstances
You are in receipt of an allowance paid in accordance with section 29 of the Safety, Rehabilitation and Compensation Act 1988 (SRCA), dealing with Household Services.
Your partner is a client of the Military Compensation & Rehabilitation Service (MCRS) and you provide care to them.
The payment is not paid under section 98 of the Veterans Entitlement Act 1986.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 6-5(2).
Income Tax Assessment Act 1997 Subsection 6-15(2).
Income Tax Assessment Act 1997 Section 52-75.
Reasons for decision
Section 6-5 of the ITAA 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year. However, subsection 6-15(2) of the ITAA 1997 provides that if an amount is exempt income then it is not assessable income.
Ordinary income has generally been held to include three categories, namely, income from rendering personal service, income from property and income from carrying on a business. As the regular periodical amounts received by you are payments for personal services you have rendered in caring for your husband, they are income according to ordinary concepts and therefore ordinary income.
Subdivision 52-B of the ITAA 1997 exempts from income tax an attendant allowance paid under section 98 of the Veterans' Entitlements Act 1986 (VEA). An attendance allowance that is paid under that provision is for specific war-caused injuries or war-caused diseases payable to a veteran who is entitled to a veteran's pension under Part II of the VEA.
Although you receive an attendant care allowance from the Commonwealth Department of Veterans' Affairs, the allowance is paid under section 29 of the SRCA not section 98 of the VEA. There is no corresponding provision in the Income Tax Assessment Act 1936 or ITAA 1997 that exempts an attendant care allowance paid under section 29 of the SRCA. The attendant care allowance you receive is therefore assessable income under section 6-5 of the ITAA 1997.