At tax time, it’s crucial for NDIS support workers to understand what they can and cannot claim as work-related deductions. The Australian Taxation Office (ATO) has recently highlighted support workers as an area of focus, with many incorrect claims being made. Let’s clear up the confusion once and for all.
Quick Tip: The ATO has created specific guides for community support workers and direct carers. You can download their official PDF summary (427KB) for easy reference.
The Three Golden Rules for All Deductions
Before we dive into specifics, remember these three fundamental requirements from the ATO’s deduction guidelines:
- You spent the money yourself and weren’t reimbursed
- The expense directly relates to earning your income
- You have records to prove it (receipts for claims over $300)
The Golden Rule: No Entertainment Deductions
Here’s the bottom line that every support worker needs to know:
You CANNOT claim a deduction for the cost of any entertainment, fundraising or social functions.
This rule applies even when these activities are:
- Compulsory work events
- Non-compulsory work events you discuss work matters at
- Part of your regular duties with clients
The Most Common Mistake: Food and Drinks with Clients
One of the biggest misconceptions among support workers is that they can claim food and drinks purchased while out with clients. The ATO’s meals and entertainment guidelines are crystal clear on this. Let’s look at a real example:
Example: Coffee and Cake at the Café
Jim is an employee personal care assistant who drives his client, Lisa, to the local shopping centre every Tuesday. After shopping, they enjoy coffee and cake at a nearby café. Jim and Lisa each pay for their own items.
Can Jim claim his coffee and cake as a tax deduction?
No. This is considered private expenditure (consumption of food and drink during the workday) and is NOT deductible under Section 8-1 of the tax legislation.
Understanding the Different Scenarios
1. Food During Your Working Day
General rule: Food and drink consumed during a normal working day is private in nature and NOT deductible. This includes:
- Morning tea or coffee
- Lunch at a café
- Snacks while out with clients
- Dinner at a restaurant with a client
Exception: Only if you receive an overtime meal allowance expense that covers the meal. For 2024-25, the reasonable overtime meal amount is $37.65.
2. Travel Away from Home Overnight
If you’re travelling away from home overnight for work (not just short trips), food expenses are generally deductible under Section 8-1. However, this must be genuine overnight travel, not just working late. See the ATO’s travel expenses guide for details.
3. Meal Entertainment
Any food and drink that has the character of “meal entertainment” is NOT deductible. This includes:
- Restaurant meals
- Social functions (even work-related ones)
- Cocktail parties
- Gala dinners
- AFL games or sporting events with food
The ATO’s entertainment and functions page specifically states that support workers cannot claim these costs.
4. Client-Paid Expenses
In some cases, a support worker may pay for food and drink that’s consumed by a client without reimbursement. Even in these circumstances, where the food has the character of meal entertainment, no deduction is available.
When Might Exceptions Apply? The NTAA View
The National Tax & Accountants’ Association (NTAA) has identified limited situations where support worker expenses for leisure activities MIGHT be deductible:
- The client has a physical disability requiring high-level support (e.g., assistance with eating and bathroom facilities)
- The client would NOT be able to participate without the support worker
- The support worker’s employment duties require them to be responsible for the client’s welfare
- The client’s participation is supported by medical advice or an appropriate program
Even in these cases, the NTAA emphasises this is similar to:
- A food critic’s restaurant meal (generally not entertainment)
- A theatre critic attending shows (generally not entertainment)
- A teacher on school excursions (deductible under specific provisions)
However, this remains a grey area, and any claims should be carefully documented with supporting evidence.
What CAN You Claim?
Support workers can legitimately claim:
- Car expenses for work-related travel (88 cents per kilometre for 2024-25, up to 5,000km)
- Uniforms with logos or protective clothing
- Training courses directly related to your current job (check the occupation guides)
- Equipment required for your work (if not reimbursed)
- Phone expenses for work-related calls
- Home office expenses if you work from home (70 cents per hour fixed rate for 2024-25)
Important: The ATO specifically warns that support workers cannot claim deductions for expenses paid by the NDIS. See their NDIS tax guidance page for details.
The Bottom Line
The ATO is actively scrutinising support worker claims, particularly around:
- Car expense claims
- Leisure-type activities
- Food and drink costs
- Gifts to clients
If you’re unsure about a deduction, remember: if your employer has paid for the expense through reimbursement, you cannot claim it. And when it comes to entertainment, food, and social activities – the answer is almost always no.
Need Help?
Tax time can be confusing, especially with the unique nature of support work. If you’re unsure about what you can claim, it’s worth consulting with a tax professional who understands the specific rules for NDIS workers. Better to be safe than face an ATO audit later!
