Taxation Determination TD 2006/62
Date of effect: 4 October 2006





Appendix: 4. Payments to a volunteer foster carer will be assessable income if they are income according to ordinary concepts (ordinary income) under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) or statutory income [1] under section 6-10 of the ITAA 1997. 5. 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 services ( Brown v. FC of T [2001] FCA 596; (2001) 47 ATR 178; 2001 ATC 4294). 6. Volunteer foster carers covered by this Determination are not employees, are not carrying on a business and are not paid any amount for their time or to reward them for any personal services they provide. The payments therefore do not have the character of income according to ordinary concepts. 7. The Note to subsection 6-10(1) of the ITAA 1997 refers to the summary list in section 10-5 of the ITAA 1997 of particular types of assessable income. Allowances and benefits in relation to employment or rendering services are included in this list, and reference is made to paragraph 26(e) of the Income Tax Assessment Act 1936 (ITAA 1936). 8. The payments to volunteer foster carers covered by this Determination are made in order to help meet the expenses associated with caring for foster children, and not as a reward or recompense for any employment or rendering of services by the carer. As such, the payments do not have a sufficiently proximate connection with any employment or services rendered to be considered to be a product or consequence of such activities. Accordingly, the payments cannot be said to have been provided in respect of, or for or in relation to, such activities and are not assessable income under paragraph 26(e) of the ITAA 1936 ( Smith v. FC of T (1987) 19 ATR 274; 87 ATC 4883). Previously issued in draft form as TD 2006/D35


Ruling: 1. No. The payments as described in paragraph 2 of this Determination to a volunteer foster carer to provide foster care are not assessable income. | 2. The scheme to which this Determination applies has the following features: | Date of effect: 3. This Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of issue of the Determination. | Commissioner of Taxation 4 October 2006


Legislative references: ITAA 1936 26(e) ITAA 1997 6-5 ITAA 1997 6-10 ITAA 1997 6-10(1) ITAA 1997 6-10(2) ITAA 1997 10-5 TAA 1953
Case references: Brown v. FC of T [2001] FCA 596 (2001) 47 ATR 178 2001 ATC 4294
Subject references: allowances vs reimbursements carer payments disabled care expenses income reimbursed expenses