Private ruling: Fostering payments
Published: December 2012
Ruling period: Year ending 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Is the fortnightly fostering payment you receive for being a volunteer foster carer assessable income? | A1: No.

Relevant facts and circumstances: You are a full-time volunteer foster carer. You are not an employee of a fostering agency and you are not in the business of providing foster care. You receive a fortnightly fostering payment (based on the identified needs of the child/young person and the level of care required) for the provision of full-time care. The fostering payment you receive is to cover the costs of the child or young person in placement. These include:- · food · clothing · basic travel · contributions to household bills · children's pocket money · regular recreational activates · birthday and Christmas gifts

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1997 Section 6-10

Reasons for decision: Summary: Section 6-5 and section 6-10 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a resident taxpayer includes ordinary and statutory income derived directly and indirectly from all sources during the income year. In determining if an amount is income according to ordinary concepts, consideration must be given to whether the amount is the product of any income producing activity. Such an activity could include employment, carrying on a business or rendering a service. Taxation Determination TD 2006/62 considers the taxation treatment of certain payments to volunteer foster carers to provide foster care. TD 2006/62 provides that payments made to volunteer foster carers are not assessable income where: · the payments are made to help meet the costs associated with providing care for foster children · the foster carer is not an employee of a foster care agency · the payments are not received as part of a business of providing foster care · the payments are the standard or basic foster care subsidies plus additional loadings or allowances and are not payments for, or in the nature of payments for, the provision of services. In your case, the fortnightly fostering payments you receive are made to help you meet the ongoing costs associated with providing care for your foster care placements. You are not an employee of the foster care agency, are not carrying on a business of providing foster care and are not paid for any personal services you provide as a foster carer. Payments to volunteer foster carers for a child in care are regarded as a reimbursement of the costs associated with the care of that foster child. Such payments are not ordinary income or statutory income. As the payments are not ordinary or statutory income it is not assessable income and you are not required to include this income anywhere in your tax return.

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