A disabled taxpayer has been denied a deduction for his wife’s travel costs where she accompanied him to conferences overseas.

The taxpayer needed a carer to assist him in performing a number of daily tasks such as walking, showering, using the toilet and dressing. In the 2013-14 income year, he paid for his wife wife’s ‘travel costs’ (but didn’t otherwise pay her) to travel with him to the UK so that she could be his personal carer, while he attended 2 work-related conferences. The taxpayer’s employer met all his travel expenses.

The ATO issued a private ruling stating that the travel expenses incurred by the taxpayer were not deductible under s 8-1 ITAA 1997 because they were of a private or domestic nature. The ATO also ruled that a deduction was denied under s26-30 ITAA 1997. That section generally denies a deduction for the travel costs of a ‘relative’ who accompanies a taxpayer on work-related travel, subject to certain exceptions.

The AAT agreed that the travel costs were not deductible under s 8-1, on the basis that the taxpayer incurred the expenses in the course of enabling him to undertake his duties rather than in the course of actually undertaking those duties. The AAT added that the expenses were also of a private or domestic nature. Thought it was not strictly necessary, the AAT also concluded that s26-30 would have precluded the deduction also.

A submission that denying the taxpayer a deduction constituted discrimination under the Disability Discrimination Act 1992 (Cth) was also rejected. The AAT said the DDA did not require the Commissioner to change the tax law for those who are disabled (unlike law preventing racial discrimination and also under the Equal Opportunity Act 2010).

(Re WTPG and FCT [2016] AATA 971, AAT, Ref No 2015/6427, Forgie DP, 30 November 2016.)

[FJM] [LTN 236, 6/12/16]

FJM Note

With respect to the Tribunal, I find it difficult to accept her conclusion that s8-1 did not give a general deduction for this expense. This seems to me be no different to the taxpayer paying for an additional seat on the plane because this was required to accommodate his disability. Whilst the cost of a carer at home will not be deductible, that could all change on a trip overseas for work related purposes (especially one endorsed, and financially supported, by his employer). For instance, home to work travel, which is normally not deductible, becomes deductible on such trips. Also, the cost of meals, which is not ordinarily non-deductible, becomes deductible on such trips.

Dealing with the express prohibition on deducting relatives travel expenses, in s26-30 of the ITAA 97, is more difficult, but not impossible. Again, with respect to the Tribunal, I found her reasoning on this provision wanting. She merely asserts that “an exception if the relative is accompanying the taxpayer as a carer and in the role of carer” without definitive reasons.

It seems that the only expense the taxpayer wanted to claim were her ‘travel expenses’ (which he would meet). The reasons do not say what these were, but I could surmise that they included her airfare and perhaps other costs, such as meals (given that the taxpayer’s employer was meeting their accommodation costs). He did not otherwise remunerate her.

If there was an employment arrangement then taxpayer may have been providing a ‘fringe benefit’, the cost of which, is saved from being non-deductible, under ss(3). The Tribunal gave no consideration to that subsection.

Section 26-30 Income Tax Assessment Act 1997

Relative’s travel expenses

(1)  You cannot deduct under this Act a loss or outgoing you incur, insofar as it is attributable to your * relative’s travel, if:

(a)  you travelled in the course of performing your duties as an employee, or in the course of carrying on a * business for the purpose of gaining or producing your assessable income; and

(b)  your relative accompanied you while you travelled.

Exception to subsection (1)

(2)  Subsection (1) does not stop you deducting a loss or outgoing if:

(a)  your * relative, while accompanying you, performed substantial duties as your employer’s employee, or as your employee; and

(b)  it is reasonable to conclude that your relative would still have accompanied you even if he or she had not had a personal relationship with you.

Exception when you provide a fringe benefit

(3)  Subsection (1) does not stop you deducting expenditure you incur in * providing a * fringe benefit.

This section also applies to individuals who are not employees

(4)  If an individual is not an employee, but receives, or is entitled to receive, * withholding payments covered by subsection (6), this section applies to the individual as if:

(a)  he or she were an employee; and

(b)  the entity, who pays (or is liable to pay) * withholding payments covered by subsection (6) that result in the individual being in receipt of, or entitled to receive, such payments, were the individual’s employer; and

(c)  any other individual who receives (or is entitled to receive) * withholding payments covered by subsection (6):

(i)  that result in that other individual being in receipt of, or entitled to receive, such payments; and

(ii)  that the entity pays (or is liable to pay) to that other individual;

were an employee of the entity.

This section also applies to entities who are not employers

(5)  If an entity is not an employer, but pays (or is liable to pay) * withholding payments covered by subsection (6), this section applies to the entity as if:

(a)  it were an employer; and

(b)  an individual to whom the entity pays (or is liable to pay) such withholding payments were the entity’s employee.

Withholding payments covered

(6)  This subsection covers:

(a)  a * withholding payment covered by any of the provisions in Schedule 1 to the Taxation Administration Act 1953 listed in the table; and

(b)  a withholding payment covered by section 12-47 in Schedule 1 to the Taxation Administration Act 1953 where:

(i)  the payment is made to a religious practitioner by a religious institution; and

(ii)  the activity, or series of activities, for which the payment is made is done by the religious practitioner as a member of the religious institution.


Withholding payments covered
Item Provision Subject matter
1 Section 12-40 Payment to company director
2 Section 12- 45 Payment to office holder
3 Section 12-50 Return to work payment
4 Subdivision 12-D Benefit, training and compensation payments