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Dependent (invalid and carer) tax offset

Discussion in 'Accounting & Tax' started by paulF, 26th Oct, 2015.

  1. paulF

    paulF Well-Known Member

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    29th Jun, 2015
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    Location:
    Melbourne
    Hey guys,
    Not property tax related but thought i'd ask anyway.
    I send money for my brother who's got a disability(28 years of age) and who's overseas(not an Australian citizen) and while doing my tax return this year, I came around the Dependent (invalid and carer) tax offset...

    Just wondering if anyone had any experience claiming the Dependent (invalid and carer) tax offset in such circumstances please. I'm not sure if i can apply for the offset because he is overseas and he's not an Australian.

    Cheers
     
  2. Rob G

    Rob G Well-Known Member

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    The fact that it is your brother suggests no eligibility for the DICTO.

    The only non-resident dependants that might qualify is a spouse or child, s.61-10(1)(c) ITAA97.

    Even then, their domicile must be in Australia. This is much a much broader concept than citizenship.

    e.g. born here and intending to return here to settle down after an overseas stay.
     
  3. paulF

    paulF Well-Known Member

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    Melbourne
    Thanks for that Rob,
    I didn't have high hopes for it but thought i'd ask.
    Will call the ATO anyways and get some more clarifications.

    Cheers
     
  4. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Yes. Call Centrelink too and see if they will pay a disability support pension to a non-resident. FFS this is why over 50% of tax goes to welfare.
     
  5. paulF

    paulF Well-Known Member

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    Paul@PFI, keep your resentment and negativity to yourself. I don't see what's wrong with what i'm doing. Isn't it similar to tax charity concessions?
     
  6. Chrispy

    Chrispy Well-Known Member Premium Member

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    I supported my Brother In Law for 7 years. He was in Residential Care and obtained a Disability Support Pension, which paid for a small portion of the weekly cost. I paid out approx $750 a month for him. When I contacted Centrelink I was told that I needed to obtain his Doctor's support for the application. His Doctor (Psych) refused to support me because my BIL did not live with me. I took BIL to him monthly and he was aware that I paid all his bills and visited my BIL every second day.
     
  7. MikeLivingTheDream

    MikeLivingTheDream BCOM MCOM MTAX CPA CTA Registered Tax Agent

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    Philippines
    As long as you follow the rules and meet the various criteria then agreed whats the issue.

    Many pensioners are living overseas and are entitled to a government pension. They meet the criteria and comply.

    You may not like the rules but some people dont like or agree with negative gearing. As long as you follow the rules then its not an issue. If enough people dont like it they vote for a change.
     
  8. Rob G

    Rob G Well-Known Member

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    Dependant offsets actually make economic sense, even if they add complexity to the tax system.

    Some countries tax the 'family unit'. Consequently a single earner maintaining a large family can effectively access multiple tax free thresholds.

    Contrast with the Australian system where the breadwinner for a large family pays the same amount of tax as a single person on the same income.

    In fact the single person with their greater disposable income can also salary sacrifice or negatively gear into investments and pay less tax on the same economic income.

    However, the DICTO is only available for costs of maintaining a relative with a disability support pension or maintaining a relative in receipt of a carers allowance.