A letter written to Prime Minister Malcolm Fraser in the International Year of Disabled People 1981 outlining the case for extra costs of disability and the injustices of the tax system

Unavoidable extra costs of disability

During this International Year of Disabled Persons, the community, governments and its Ministers have been responding to the United Nations’ call of full participation with equality for disabled people. In Australia attention is being focused on the disadvantage that disabled people face in participating when they bear non-optional extra costs as a result of their disabilities. Such extra expenses as the costs of transport, necessary independence equipment, paid assistance for daily living activities and household tasks impose restrictions on the choices and level of independence of disabled people. Families with disabled members not only have reduced choices regarding disposable income, but also of time, as caring for a disabled relative demands more of everyone involved.

Taxation concessions not directed to help disabled people

Taxation concessions are commonly used by governments to provide incentives for individuals or companies to follow policies deemed in the community’s interest. Although it is generally considered to be in the community’s interest for disabled people to be as independent as possible, current taxation policy is not directed towards that end.

There are many examples of severely disabled people now taxpayers, who have had to make the difficult decision between the safety of a pension and its fringe benefits as against the risk of gaining financial self-sufficiency. For many disabled persons the additional costs of living are even higher when employed, especially in relation to transport.

Not only does the disabled taxpayer contribute to a public transport system which he may not be able to use, but he is forced to use the most costly systems i.e. taxis and specialist private vehicles in order to attend his workplace and therefore earn his income. The disabled worker who cannot use transport, ride a a bicycle or walk, must demonstrate to a prospective employer his ability to arrive at work before he will be given a chance to earn income.

Government needs to address discrimination

Not only do policies need to be made by government to ensure the participation and equality of disabled people but to also see that those policies and objectives are unified throughout all areas of its control.

It is submitted that the Taxation Act is one area where discrimination exists and where incentives are currently contrary to objectives of independence for people with disabilities. This loss of objective becomes even more incongruous when many income earners, such as gold producers, pay no tax at all. R

It is requested that the Government and its Tax Officers examine the current Act in the areas of Direct Deductions and Allowances and make changes in keeping with the following objectives.

Tax deductions to correct injustices of disabled taxpayers

To correct injustices and disadvantage experienced by the disabled taxpayer in Section 51 (l) of the Taxation Act, I propose allowable deductions be introduced:
“All losses and outgoings to the extent to which they are incurred in gaining or producing the assessable income or are necessarily incurred in carrying on a business for the purpose of gaining or producing such income, shall be allowable deductions except to the extent to which they are losses or outgoings of capital, or of a capital, private or domestic nature, or are incurred in relation to a gaining or production of exempt income”.

This would create incentives for people to seek and hold employment as well as encourage independence, family involvement and community living.

Deductions needed for transport, parking, equipment and support costs

The following areas of direct deductions should be allowed to the disabled taxpayer under Section 51 (l) A. TRANSPORT
For those taxpayers whose disability denies them access to public transport

  • Depreciation on a vehicle and its adaptions.
  • Vehicle running costs attributed to employment, including to and from employment and cost of a driver if necessary. There is a non-optional difference between disabled and able-bodied people in getting to their workplace. People with severe disabilities should be treated in the same way as a salesman or businessman who is allowed these deductions already in tax law.

B. PARKING

Full cost of parking fees where, as a result of disability, it is necessary to park close to employment. Again, without proper parking provision a disabled person may not be able to earn income.
C. INDEPENDENCE EQUIPMENT

Depreciation on independence aids and equipment used in employment.

Running and maintenance costs on items of equipment used in employment.

Cost of special personal equipment used during the course of employment. These deductions would cover items such as wheelchairs, hearing-aids and the cost of batteries, porta-printers, guide-dogs and their maintenance, special clothing adaptions, catheters, etc.

D. ATTENDANT CARE EXPENSES
Those disabled taxpayers who require an attendant to assist with travel to and from or during work, dressing for work, toileting and feeding requirements while at the place of employment should receive these direct deductions including any other costs incurred by the attendant.

Recognition of extra costs will spur more to work

The above items are at present categorised as medical expenses to disabled persons as part of the general fixed concessional rebate. The tax benefit of direct deductions is not only just to the disabled taxpayer by recognising the additional expenditure their disability imposes in earning their income, but also provides incentives for others to join the workforce.

Rebates for taxpayers caring for disabled persons

Most Concessional Rebates in fact give little or no benefit to the taxpayer maintaining a disabled child, invalid relative or spouse. For a real benefit and incentive to family involvement the taxpayer should be able to make direct deductions under Section 51 (l) for non-optional additional costs incurred by this responsibility. The least consideration asked for is to ensure the availability of additional or unlimited rebates for the taxpayer caring for a disabled person.

A. DISABLED CHILDS ALLOWANCE
There are no direct tax benefits to the taxpayer maintaining an invalid child under 16 years. A fortnightly allowance, The Handicapped Child’s Allowance, is payable to the family, but if the child were in an institution, that body would receive approximately twice the amount the family receives. The eduction allowance, part of the Concessional Rebate, which has a maximum of $250 is an allowable concession to general taxpayers. This amount would not cover extra schooling costs incurred by a disabled child. If the Government is to be consistent in supporting community living, it would seem reasonable to allow for full deductions or much higher allowance limits to taxpayers maintaining a disabled child at school.


B. INVALID RELATIVE OR SPOUSE ALLOWANCE
Section 159 (J) “Invalid Relative Allowances” entitles a taxpayer to a maximum rebate of $362 for an invalid relative over 16 years of age. To receive the allowance the relative must be in receipt of the Invalid Pension with the allowance to the taxpayer being reduced by $1 for every $4- earned including pension over $272 per annum. The relative on full pension would attract no allowance at all. The taxpayer who has a disabled spouse is limited to a combined Housekeeper/ Spouse allowance of $800.

This seems an incredibly meagre amount when the time and effort involved in such care is considered. The young family with a disabled parent or family member must have expensive outside help and their efforts to avoid more costly institutional care to the general taxpayer, should be encouraged.

Richard D. Llewellyn