Spouse rebate: Part Year Employment of Taxpayer's Spouse

Is a taxpayer entitled to a partial spouse rebate under subsection 159J(3) of the Income Tax Assessment Act 1936 where the taxpayer's spouse was employed for only part of the year?

The taxpayer is not entitled to a partial spouse rebate under subsection 159J(3) the Income Tax Assessment Act 1936 .

The spouse of the taxpayer (the spouse) is employed in shiftwork for the first few months of the financial year. During this period, the spouse earns considerably more than $5,246 (the relevant separate net income threshold for the 1995-96 income year). During the rest of the financial year the spouse is unemployed and earns no income. The taxpayer and the spouse live together for the whole financial year.

Subsection 159J(1) the Income Tax Assessment Act 1936 provides for a rebate where during the year of income the taxpayer contributes to the maintenance of a dependant who is an Australian resident.

As the taxpayer and the spouse resided together during the whole of the year of income, subsection 159J(5) the Income Tax Assessment Act 1936 deems the taxpayer to have contributed to the maintenance of the spouse for the whole of the year of income unless the contrary is established to the satisfaction of the Commissioner. The Commissioner will generally not be satisfied that the taxpayer did not contribute to the maintenance of the spouse during a period unless the taxpayer can show that the spouse was entirely self-supporting during the period. That in fact the taxpayer contributed in no way to the spouse's maintenance during the period (Taxation Ruling IT 2453).

That the spouse earnt a substantial amount of money during the first few months of the income year sufficient to provide some standard of self-support does not mean that the taxpayer did not contribute in any way whatever to the spouse's maintenance during this period. Furthermore, the fact that the spouse worked shift work while the taxpayer worked a normal day job does not provide evidence that the taxpayer did not contribute to the spouse's maintenance during the period the spouse was employed.

As the taxpayer is deemed to have maintained the spouse for the whole of the income year, subsection 159J(3) the Income Tax Assessment Act 1936 which allows a taxpayer to claim a partial spouse rebate where the taxpayer contributed to the maintenance of the spouse during part of the year only, has no operation.

As the spouse's separate net income for the 1995-96 year of income exceeds $5246, the taxpayer is not entitled to claim any spouse rebate.