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Edited version of your private ruling
Authorisation Number: 1012607887574
Ruling
Subject: Volunteer career payments
Question
Are the fortnightly reimbursement payments you receive for being a volunteer carer assessable income?
Answer
No.
This ruling applies for the following periods
Year ending 30 June 2014
Year ending 30 June 2015
Year ending 30 June 2016
The scheme commences on
1 July 2013
Relevant facts and circumstances
You provide full-time care in your own home for a person who has a disability through a private not-for-profit organisation
You are not an employee of the organisation and you are not in the business of providing full-time or part-time care.
Once you have finished caring for the current person you do not anticipate caring for any other persons.
You receive a fortnightly reimbursement payment to cover the costs of the person in your care. These include items such as:-
• food and drink
• laundry
• transport
• contributions to household bills
• regular recreational activities
• medications, personal and oral hygiene items
• medical and therapy appointments
You incur costs and you expect that your costs will exceed the payment you will receive.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1997 Section 6-10
Reasons for decision
Section 6-5 and section 6-10 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a resident taxpayer includes ordinary and statutory income derived directly and indirectly from all sources during the income year.
In your situation you are providing care for a disabled person and you receive an amount which is intended to reimburse you for the various costs you incur to look after the person. You have advised that you believe that the amounts you will receive will not cover the costs that you will incur in relation to the person you are caring for.
Taxation Determination TD 2004/75 Income tax: are payments to a volunteer respite carer to cover expenses of providing respite care for a disabled person assessable income, provides guidance about where a carer receives a reimbursement for the costs of caring for a disabled person. Where the payment is intended to cover expenses incurred in providing the care including food and drink, laundry, recreation activities and transport the payment is considered to be in the nature of a reimbursement of expenses and therefore is not assessable income.
Based on the facts provided we accept that you are receiving monies with the intention that these monies will be used to cover the costs you incur in providing care to the disabled person. Such payments are not considered to be ordinary income or statutory income.
Therefore, the payments do not form part of your assessable income and you are not required to include the amounts in your tax return.