ATO ID 2002/495: Deductibility of meal expenses - live-in carer
Date of decision: 30 January 2002
Year of income: Year ended 30 June 2001
Business line: Small Business/Individual Taxpayers

Issue
Is the taxpayer who is a live-in carer entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for the cost of their meals?

Decision
No. The taxpayer who is a live-in carer is not entitled to a deduction under section 8-1 of the ITAA 1997 for the cost of their meals.

Facts
The taxpayer is employed as a personal carer. They provide care for 24 hours per day in the home of the person they are caring for. They provide this care for a number of days each week. The taxpayer provides their own food for their daily meals. They are not paid an allowance for these meals.

Reasons for decision
Summary: Section 8-1 of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income or non-assessable non-exempt income. Expenditure on the daily necessities of life (eg food and drink) is generally a private expense and is not incurred in gaining or producing assessable income. The issue of the deductibility of meals was considered by the Full Federal Court in FC of T v. Cooper (1991) 29 FCR 177; [1991] FCA 164; (1991) 21 ATR 1616; 91 ATC 4396 where Hill J stated (FCR at page 201; FCA at paragraph 56; ATR at page 1638; ATC at page 4415) Food and drink are ordinarily private matters, and the essential character of expenditure on food and drink will ordinarily be private rather than having the character of a working or business expense. However, the occasion of the outgoing may operate to give to expenditure on food and drink the essential character of a working expense in cases such as those illustrated of work-related entertainment or expenditure incurred while away from home. The reference to 'expenditure incurred while away from home' means the taxpayer must be travelling for work purposes. Where a taxpayer is required to travel for work purposes, the cost of meals may be deductible. Examples are an office worker attending an interstate conference or an 'on-road' salesman. The taxpayer cannot be considered to be travelling for work as they continue to perform their employment duties at their ordinary place of work. The taxpayer's circumstances do not change the essential character of the expense as private or domestic in nature. The expenditure incurred by the taxpayer on meals is private or domestic in nature and is not incurred in gaining or producing assessable income. Therefore, the cost of meals incurred by the taxpayer is not deductible under section 8-1 of the ITAA 1997.

Legislative references: Income Tax Assessment Act 1997 section 8-1
Case references: FC of T v. Cooper (1991) 29 FCR 177 [1991] FCA 164 (1991) 21 ATR 1616 91 ATC 4396
Subject references: Deductions and expenses Meal and food expenses