Deductions and expenses: Child Care Expenses

Whether the taxpayer, who is employed in an on-call capacity in the emergency section of a hospital, is entitled to claim for expenses incurred in employing a carer to assist in caring for the taxpayer's children under subsection 51(1) of the Income Tax Assessment Act 1936 .

The taxpayer is not entitled to claim for expenses incurred in employing a carer to assist in caring for the taxpayer's children under subsection 51(1) of the Income Tax Assessment Act 1936 .

The taxpayer is a Visiting Medical Officer at a local hospital. The nature of the work is that the taxpayer is on call for twelve hour shifts at least nine times a month for accident and emergency duties and on call for 3.5 days per week for other duties.

When not working, the taxpayer's partner looks after the children. When the taxpayer's partner is away, however, the taxpayer employs a carer on a live-in basis to care for the children when the taxpayer is called out on emergency.

The deductibility of child care expenses was considered in Lodge v FC of T 72 ATC 4174; 3 ATR 254 in which a single mother claimed a deduction for payment of nursery fees to enable her to work at home and in a solicitors office (for 3 weeks of the year of income in question). The High Court held that the expenses were not deductible as the fees could not be said to be incurred in, or in the course of, the taxpayer's employment.

This principle was affirmed in Jayatilake v FC of T 91 ATC 4516; (1991) 22 ATR 125.

The fact that the child care expenses are necessitated by the on call and emergency nature of the taxpayer's employment does not alter the private character of the expense. The expense is neither relevant nor incidental to the production of the taxpayer's assessable income and therefore not deductible pursuant to section 51(1) of the Income Tax Assessment Act 1936 or section 8-1 of the Income Tax Assessment Act 1997 .