Issue
Is the taxpayer entitled to a dependant tax offset under section 159J of the Income Tax Assessment Act 1936 (ITAA 1936) for maintaining a child-housekeeper where the child is a full time student?
Decision
No. The taxpayer is not entitled to a dependant tax offset under section 159J of the ITAA 1936 for maintaining a child-housekeeper where the child is a full time student as they are not wholly engaged in keeping house for the taxpayer.
Facts
The taxpayer was unable to do the housework as a result of an injury.
The taxpayer's child took over the housework. The taxpayer paid the child for this work.
The child was a full time student and did the housework after school and on weekends.
The taxpayer and their child are both residents of Australia.
Reasons for Decision
Subsection 159J(1) of the ITAA 1936 provides that a resident taxpayer is entitled to a tax offset where, during the income year, they contributed to the maintenance of a dependant who is also a resident of Australia.
A child-housekeeper of a taxpayer may be a dependant for the purposes of the dependant tax offset (subsection 159J(2) of the ITAA 1936).
A 'child-housekeeper' is defined in subsection 159J(6) of the ITAA 1936 as being a child of a taxpayer who is wholly engaged in keeping house for the taxpayer.
The meaning of 'wholly engaged in keeping house' was considered by the Board of Review in Case M69 80 ATC 486; (1980) 24 CTBR (NS) Case 44 . It was decided in that case that a housekeeper who worked for 4 hours in the morning 5 days a week was not 'wholly engaged in keeping house'. The housekeeper must be engaged in keeping house to the exclusion of everything else.
The housekeeper must have the responsibility for, and control over, the everyday running of the house. Merely assisting with the housework is not sufficient to constitute keeping house ( Case U124 87 ATC 1204; AAT Case 142 (1987) 18 ATR 4045).
As the taxpayer's child is a full time student they cannot be wholly engaged in keeping house. Therefore the taxpayer is not maintaining a dependant child-housekeeper and is not entitled to a dependant tax offset under section 159J of the ITAA 1936.