Dependant Invalid and Carer Tax Offset (DICTO)

Offset Values – indexed annually

For the 2017-18 year the maximum Invalid and Carer Tax Offset amount available for each eligible dependent is $2,666, subject to reduction by the amount of the dependent’s Adjusted Taxable Income as set out below.

Offset values for current/recent years:

  • 2018-19 the maximum offset available for each dependent is $2,717  
  • 2017-18 the maximum offset available for each dependent is $2,666
  • 2016-17 the maximum offset available for each dependent is $2,627
  • 2015-16 the maximum offset available for each dependent is $2,588
  • 2014-15 the maximum offset available for each dependent is $2,535
  • 2013-14 the maximum offset available for each dependent is $2,471
  • 2012-13 the maximum offset available for each dependent is $2,423

DICTO – Key Eligibility Requirements

  • claims can only be made in respect of specific family members
  • relevant pension or allowance must have been received
  • income tests apply to both the person claiming and the dependent family member

DICTO Dependent’s income limits

The tax offset is reduced by $1 for every $4 that your dependant’s Adjusted Taxable Income (ATI)* for the period you are claiming the offset exceeds $282. This means the offset is reduced to nil once dependent’s income exceeds:

  • $11,150 in 2018-19
  • $10,946 in 2017-18
  • $10,790 in 2016-17
  • $10,634 in 2015-16
  • $10,422 in 2014-15
  • $10,166 in 2013-14
  • $9,974 in 2012-13

The tax offset is also reduced if

  • you maintained your dependant for only part of the year
  • another person helped to maintain your dependant
  • your dependant was an Australian resident for tax purposes for only part of the year, or
  • your dependant was an invalid or carer for only part of the year.

 

Adjusted Taxable Income Formula

The government has adjusted the formula for the inclusion of the value of fringe benefits in Adjusted Taxable Income.

The meaning of ‘adjusted fringe benefits total’ is modified so that the gross value rather than adjusted net value of reportable fringe benefits is used, except for PBIs, hospitals and charities.

‘adjusted fringe benefits total’ is a component of Adjusted Taxable Income

This affects eligibility for:
family tax benefits, stillborn baby payment,child care benefit, Youth Allowance, Abstudy and Isolated Children’s Allowance
parental leave pay and dad and partner pay
low income superannuation contribution payment
net medical expenses offset
dependant (invalid and carer) (DICTO) tax offset
Notional dependent’s offset for the Zone & overseas personnel tax offsets

For details of the amending legislation see Budget Savings (Omnibus) Act 2016 (Schedule 15). The measures received royal assent on 16 September 2016 and according to its terms therefore take effect from 1 January 2017 for family assistance payments and for income tax tests from 1 July 2017.

The offset value is indexed annually.
Sect 61.30  indexation

Invalidity and Carer Obligations

The dependant (invalid and carer) tax offset commenced on 1 July 2012, and is available to taxpayers who maintain a dependant who is genuinely unable to work due to invalidity or carer obligations.

A taxpayer is not entitled DICTO for a spouse for an income year if they or their spouse were eligible for Family Tax Benefit Part B, without shared care.

Taxpayers who receive the Zone or overseas forces or overseas civilians tax offsets are not entitled to claim the DICTO but continue to have access to other dependents claims for zone tax offset calculation purposes – subject to phase-out proposals contained in the 2014 Budget which take effect from 1 July 2014. (See zone tax offset)

If you are not eligible for a zone or overseas forces tax offset, the dependant (invalid and carer) tax offset from 2012-13 replaces offsets for:

  • Spouse born on or after 1 July 1952
  • Parent
  • Parent in law
  • Invalid relative.

Eligible dependants:

  • spouse
  • child, brother or sister aged 16 years old or older
  • spouse’s child, brother or sister aged 16 years old or older
  • parent, or spouse’s parent

If the dependant is not your spouse or child, you cannot claim this tax offset if your dependant did not reside in Australia or was only visiting you during a holiday in Australia.

You can only claim for your spouse as an invalid spouse or a carer spouse, not both.

Income Test For Claimant (Primary Income Earner Limit)

From 1 July 2015 this limit is lowered to $100,000. You cannot claim this tax offset if your Adjusted Taxable Income is more than $100,000. Your spouse’s ATI is not counted against this limit.

Before 1 July 2015 this limit was $150,000.

The claim is reduced if

..for any period that you, or your spouse were:

  • eligible for Family Tax Benefit (Part B), or
  • receiving parental leave pay (Dad and Partner Pay excluded)

Definitions

You ‘maintain‘ a dependant if:

  • you and the dependant lived in the same house
  • you gave the dependant food, clothing and lodging, or
  • you helped them to pay for their living, medical and educational costs.

Your ‘spouse‘ includes another person (whether of the same sex or opposite sex) who:

  • you were in a relationship with that was registered under a prescribed state or territory law
  • although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple.

A dependent invalid can be your:

  • spouse
  • child, brother or sister aged 16 years old or older
  • spouse’s child, brother or sister aged 16 years old or older
  • parent, or spouse’s parent

who is paid:

  • a disability support pension or a special needs disability support pension under the Social Security Act 1991 or
  • an invalidity service pension under the Veterans’ Entitlements Act 1986.

A dependent carer can be your:

  • spouse or
  • parent, or spouse’s parent

who is caring for your or your spouse’s child, brother or sister aged 16 years old or older.

‘Relevant’ Pension or Allowance

DICTO eligibility is restricted to carers and or dependents who have received specific pensions or allowances:

The dependent carer must be:

  • receiving a Carer Allowance or Carer Payment in respect of the care they provide or
  • wholly engaged in providing care to someone who receives a disability support pension, special needs disability support pension or invalidity service pension.

Where another person or persons contributed to the maintenance of your dependant, the claim is apportioned.

Adjusted Taxable Income for these purposes means the following:

  = Taxable income

+ Reportable employer superannuation contributions
+ Deductible personal superannuation contributions
+ Adjusted fringe benefits (total reportable fringe benefits amounts multiplied by 0.535)
+ Certain tax-free government pensions or benefits received by the person
+ Target foreign income (income and certain other amounts from sources outside Australia not included in your taxable income or received as a fringe benefit)
+ Net financial investment loss (the excess of financial investments deductions over total financial investment income)
+ Net rental property loss

 – LESS – any child support payments the person provided to another person.

Further Information:

 

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This page was last modified 2018-12-10