Support Workers Claiming Expenses: A Comprehensive Guide

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Introduction

Support workers play a crucial role in providing essential services to individuals in need, whether it’s at a client’s home, nursing homes, or hospitals. Navigating the tax implications of these services can be complex, particularly when it comes to claiming expenses. This guide aims to simplify the process, outlining when and how support workers can claim deductions for car and other transport expenses, supported by the Australian Tax Office’s (ATO) general deductibility principles.

Identifying Deductible Car Expenses for Support Workers

Travel to a Client’s Home, Nursing Home, or Hospital

Support workers frequently travel to various locations to deliver their services. Understanding whether these travel costs are deductible involves analyzing the nature of the travel and the specific locations involved.

Travel Directly from Home

Travel directly between a support worker’s home and a work location (such as a client’s home, nursing home, or hospital) is generally not deductible if these locations are considered regular workplaces. A regular workplace is defined as a usual, normal, or routine place where the support worker performs their duties.

However, if the support worker travels to these locations on an ad-hoc basis, making them alternative workplaces, the travel costs may be deductible. This determination can often require a detailed analysis of the worker’s employment contract and customary industry practices.

Travel from Employer’s Business Premises

Travel between an employer’s business premises and a client’s home, nursing home, or hospital is generally deductible. This travel is considered to be between two related work locations, making the expenses incurred eligible for deduction under the ATO’s guidelines.

Travel Between Workplaces of the Same Employer

Support workers may travel between different work locations for the same employer, such as moving from one client’s home to another. These travel expenses are usually deductible, provided the travel is necessitated by employment.

Example: Mary, a community support worker, travels from her home to various clients’ homes and occasionally to her employer’s office. Since Mary’s work involves shifting places of work, her travel expenses are generally deductible.

Travel Between Workplaces of Different Employers

Support workers often juggle multiple roles for different employers. Travel between workplaces of different employers is generally deductible, provided the travel is directly related to the income-earning activities of each role.

Example: An employee who works as a home-based support worker for one employer and a registered nurse at a hospital for another can claim travel expenses between these two workplaces.

Travel involves Assisting Clients

Support workers often assist clients with daily tasks, including shopping and attending medical appointments. The costs incurred in driving clients to these locations are typically deductible, as they are a necessary consequence of employment duties.

Example: Bill, a community carer, drives his client to do weekly shopping. The car expenses incurred in this travel are deductible as they directly relate to his employment duties.

The ATO’s Three-Month Rule

The ATO provides a three-month rule of thumb to determine if a work location has become a regular workplace. If a support worker works at a location for three months or more, it is likely to be considered a regular workplace. However, if the visits are infrequent, such as once a fortnight over four months, it may still be considered an alternative workplace, making travel expenses deductible.

Claiming Deductions for Leisure-Type Activities

Support workers sometimes accompany clients on leisure activities, which include sporting events, arts and crafts, and community outings. Generally, the costs associated with these activities are not deductible, as they are considered entertainment.

Example: Sue, an activity support worker, participates in daily activities with her clients but cannot claim deductions for her participation costs, as these are classified as entertainment.

However, if the client requires significant support due to a physical disability and the activity is medically advised, the NTAA believes these expenses may be deductible. This aligns with cases where the activity is necessary for the client’s well-being and the support worker’s duties involve ensuring the client’s welfare.

Claiming Deductions for Food and Drink

Support workers may incur expenses on food and drink while performing their duties. The deductibility of these expenses depends on the context.

  • Normal Working Day: Generally, these expenses are private and not deductible unless they are overtime meal expenses or incurred while traveling overnight for work.
  • Traveling Overnight for Work: Expenses on food and drink during overnight travel for work are deductible, provided they are not private or considered meal entertainment.
  • Meal Entertainment: Expenses considered meal entertainment, such as dining at restaurants, are not deductible.

Example: Jim, a personal care assistant, buys coffee and cake for himself and his client. The expenses for Jim’s food and drink are not deductible as they are considered private or meal entertainment.

Claiming Deductions for Gifts

Gifts provided to clients, such as for birthdays or special occasions, are generally not deductible. The expenses are viewed as providing a benefit to the client rather than being incurred in the course of earning income.

Example: An employee fitness instructor’s claim for gifts to clients was denied as the expenditure was not incidental to earning assessable income.


Conclusion

Navigating the complexities of claiming expenses as a support worker can be challenging. Understanding the ATO’s guidelines and principles is crucial for making accurate claims. From travel expenses to costs incurred during daily duties, support workers must carefully assess the nature of each expense to determine its deductibility. By following the ATO’s rules and seeking professional advice when needed, support workers can ensure they maximize their allowable deductions while complying with tax regulations.

Important links

ATO TR 2021/1

Community Support Workers and Direct Carers Fact Sheet

ATO TD 94/55

FAQs

Can support workers claim travel expenses to a client’s home? Yes, if the client’s home is not a regular workplace and the travel is ad-hoc, the expenses are deductible.

Are travel costs between different clients’ homes deductible? Yes, travel costs between different work locations for the same employer on the same day are generally deductible.

Can support workers claim expenses for leisure activities with clients? Generally, no. However, exceptions may apply if the activity is essential for the client’s well-being and the support worker’s role involves providing necessary care.

Are food and drink expenses incurred during work deductible? Food and drink expenses during a normal workday are typically not deductible unless they are overtime meal expenses or incurred during overnight travel for work.

Can support workers claim deductions for gifts to clients? No, gifts to clients are generally not deductible as they are considered personal and not directly related to earning income.

How does the ATO’s three-month rule affect travel expense claims? The three-month rule helps determine if a location is a regular workplace. Frequent travel to a location for three months or more can make it a regular workplace, impacting the deductibility of travel expenses.