Deductibility of child support payments

Is the taxpayer entitled to a deduction for child support payments under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?

No. The taxpayer is not entitled to a deduction for child support payments under section 8-1 of the ITAA 1997 as they were not incurred in earning their assessable income and were private in nature.

The taxpayer earns salary and wage income as an employee.

The taxpayer has been paying child support, through the Child Support Agency, to their former spouse in relation to their child.

Section 8-1 of the ITAA 1997 allows a deduction for all losses or outgoings to the extent that they are incurred in gaining or producing assessable income, or are necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income. However, no deduction is allowed where the losses or outgoings are of a capital, private or domestic nature or another provision prevents the taxpayer from deducting it.

The payments of child support were not incurred in earning the taxpayer's assessable income. Further they are expenses of a private nature.

Accordingly, the taxpayer is not entitled to a deduction for their child support payments under section 8-1 of the ITAA 1997.

Note: Paragraph 26-40(b) of the ITAA 1997 provides that the taxpayer is not entitled to a deduction for expenses incurred in maintaining a child of theirs who is under 16 years of age.