Cost of completing Centrelink forms - deductible?

Discussion in 'Accounting & Tax' started by qak, 3rd Feb, 2020.

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  1. qak

    qak Well-Known Member

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    Interesting question on another forum I am on.

    When filling in Centrelink forms for aged care fees, they can be quite complex and time-consuming, more so if you have to do the Private Company or Trust forms.
    I understand it is now compulsory to complete these forms, where in the past they would just charge the maximum rate if you chose not to disclose.

    If you asked your accountant/tax agent to help/fill in the forms - will their fee be tax deductible for the applicant?
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Pensions are assessable income so perhaps.
     
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  3. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Aged care applications = No.

    s25-5 ITAA97 provides a statutory deduction for tax agent services and refers to "managing tax affairs". A pension application does not manage tax affairs but creates one and is preliminary. Not unlike why a taxpayer cannot deduct costs for applying for work.
    (We have a aged care service provided by our financial advisers and this is a common question)

    If there is a trust involved you likely need legal advice as well. There may be sound reasons to exclude the persons as beneficiaries if they have received trust income in the past 5 years. Centrelink may deem the all of the trust income and assets are the applicant/s.

    Accountants and tax agents may be unable to assist as the provision of government benefits is a financial product hence a AFSL may be required. ie Our financial advisers offer such a service but our tax practice cannot assist these services as it is not covered by PI insurance. The financial adviser PI policy does cover these services.
     
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  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Can you back this up? Legislation?
     
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  5. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Our (accounting) insurer defines our "professional business" and specifically excludes any such services incl centrelink benefit forms, superannuation products and claims, life insurance policies and claims. Assistance with providing accounting services to provide data for the forms to be completed by the client is permitted. Credit applications are same excepting if we hold a ACL but we can provide the data requested by the client for them to complete a credit application or provide a written letter to a third party to confirm data or information we possess. It also excludes us providing legal advice or legal services and defines some matters they consider are legal services eg wills, agreements, estate administration and discharge of death benefits and contracts are some examples.

    However, the Centrelink definition of assets and income is different to accounting & tax information and may be incorrect if accounting methodology is used. eg Our financial advisers often find people include high values for possessions as assets.

    Age pensions are a financial product and often are affected by other financial products (ie super, financial investments etc).
    RG36 : https://download.asic.gov.au/media/3889417/rg36-published-8-june-2016.pdf
    RG244 Giving financial product advice | ASIC - Australian Securities and Investments Commission
     
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  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    I mean legislation - what section of the Corporations Act or regulations?

    The words 'pension' or 'social security' don't appear in either of those RG docs.

    Advising on social security is legal advice in my opinion. Not sure what authorises a financial planner to advise on the act - interpret legislation etc. I don't think a pension would be a financial product unless it was from a superfund.
     
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  7. qak

    qak Well-Known Member

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    The forms relate to assessment of means-tested fees, not any income (individual not eligible for any pensions or benefits etc).

    I don't think there's financial product advice involved, it is just reporting what the assets actually are on the forms.

    I can see that it's probably not tax-related ... what if the financial planner did the forms, would their fee be deductible?

    Is there any deduction available for complying with government requirements?
     
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  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    if it doesn't relate to the production of income I can't see how fees could be claimable.

    I agree that helping someone fill in a form regarding pensions wouldn't involve financial advice, but just check your insurance.
     
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