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Is the taxpayer entitled to claim a deduction for the cost of employing a home help service under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?

No. The taxpayer is not entitled to a deduction for the cost of employing a home help service under section 8-1 of the ITAA 1997.

The taxpayer receives a superannuation pension and a government pension. The taxpayer also receives a Carers Allowance from Centrelink.

The taxpayer employed a home help service because of ill health.

Section 8-1 of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature.

The expenditure on home help services is not incurred in the course of gaining or producing assessable income. That is, the expense was not incurred in order to produce income from a superannuation or government pension, or a Carers Allowance from Centrelink.

In addition, the expenses directly relate to the taxpayer's personal circumstances (their health) and can therefore be characterised as being private or domestic in nature.

The cost of employing a home help service by the taxpayer is therefore not deductible under section 8-1 of the ITAA 1997.