Tax breaks for live-in carers to drive NDIS savings

27 August 2025

A tax concession for live-in supporters could make Individualised Living Arrangements (ILAs) more accessible and attractive, leading to National Disability Insurance Scheme (NDIS) savings, according to a report launched today by KPMG Australia. 

ILAs, such as host and homeshare, are a cost-effective form of support for people with disability and typically cheaper than group homes.  These arrangements could save the government $260 million over five years if 500 more people each year chose to live in an ILA, rather than in a group home, according to the Summer Foundation, a key contributor to KPMG’s Tax concession for live-in supporters report.

“ILAs are proven to be extremely successful in the UK and Canada, providing a huge benefit to the community.  There is also good research to show they are very cost-effective,” said Alia Lum, Head of Tax Policy at KPMG, who authored the report.

“We recommend that Australia align with the approach taken in countries like the UK where specific tax relief is provided for live-in supporters, to make this type of support more readily accessible and attractive. We are at a critical juncture, where the cost of the NDIS continues to escalate, so one way of making the NDIS more sustainable is to scale up the use of ILAs.”

Recommendations for expansion of ILAs in Australia

ILAs are underutilised in Australia, not helped by uncertainty around the tax consequences for live-in supporters and complexities around determining their tax deduction claims.  Currently, there are just 520 NDIS participants living in ILAs supported by NDIS providers in Australia¹, while more than 10,000 people with disability in the UK are living in these types of arrangements.

“There are more than 40,000 Australians with disability who have high support needs and a tiny fraction of those people are currently living in these types of arrangements. But we think there’s plenty of room to grow,” said Summer Foundation Head of Policy, Communications and Systems Change Jessica Walker.

“The expansion of alternative housing and support options should be an urgent priority for Government, given the cost pressures on the NDIS and the poor outcomes from group homes.

“The introduction of a concessionary tax treatment for live-in supporters would make host and homeshare arrangements much more attractive to live-in supporters and providers wanting to offer these types of arrangements. Individuals who take on voluntary live-in support roles should be granted recognition—through fair, tax-free treatment that reflects their vital contribution.”

Built around the choices and preferences of the person with disability, ILAs are a contemporary model of support where a person voluntarily provides support in the home and can receive a payment or stipend.  These arrangements help individuals to live as independently as possible, and can accommodate for a variety of support needs, from assisting with daily tasks to companionship. 

But the blending of the live-in supporters’ activities and home environment, combined with the fact that supporters need to keep and maintain detailed records to substantiate tax deduction claims, means that navigating the existing tax rules is challenging.

“A concession should be provided to simplify things, along the lines of the successful UK approach,” Ms Lum said.

Where a live-In supporter’s income from an ILA is equal to or less than the fixed relief amount, no tax would be payable.  Where the live-in supporter’s income from the ILA exceeds the fixed relief amount, the difference would be treated as taxable income.  This concession would only be available to specified ‘qualifying’ live-in supporters.

“This would remove the compliance burden placed on live-in supporters, by relieving them from the complexity of determining their tax-deductible expenses, including partial tax deductions, and allowing live-In supporters to keep much simpler records,” Ms Lum said.

About the Summer Foundation

The Summer Foundation is a not-for-profit organisation working to design and scale better housing and living solutions for Australians with disability with high support needs. Home to one of Australia’s leading disability research centres, they’ve pioneered innovative solutions, like the 10+1 disability housing model and created the Housing Hub, a social enterprise. By partnering with people with disability and like-minded organisations, they aim to set a new standard in housing and living supports for people with disability.

Footnote

1.  Moving Out, Moving On: Beyond group homes for NDIS participants: Summer-Foundation-Moving-Out-Moving-On-Report (PDF 713KB)