Private ruling: Medical expenses tax offset
Published: May 2012
Ruling period: Year ended 30 June 2010 Year ended 30 June 2011
Date scheme commenced: 1 April 2010

Ruling: Q1: Is the cost of therapeutic treatment considered to be a medical expense for the purpose of claiming a medical expenses tax offset? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 159P(1) | Income Tax Assessment Act 1936 Subsection 159P(4)

Reasons for decision: Detailed Reasoning - Detailed reasoning: A medical expenses tax offset is available under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where you pay medical expenses in an income year for yourself and/or a dependant who is an Australian resident. The medical expenses tax offset is only available if the amount of medical expenses (reduced by any entitlement to reimbursement from a health fund or government authority) exceeds the annual threshold. The tax offset is 20% of the amount by which the net medical expenses exceeds the annual threshold. Medical expenses are defined in subsection 159P(4) of the ITAA 1936 to include payments to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation (paragraph (a) of the definition). Paragraph 159P(4) of the ITAA 1936 defines 'ineligible medical expenses' as payments to a legally qualified practitioner, nurse or chemist, or a public or private hospital, in respect of a cosmetic operation that is not a professional service for which a Medicare benefit is payable. This provision applies to medical expenses paid from 1 July 2005 for the 2006 income year and forward. In this case, a Medicare benefit was not payable. The cost of your child's treatment is an ineligible medical expense. Therefore, the expense does not constitute a medical expense as defined in subsections 159P(4) and (5) of the ITAA 1936.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: Your child suffered from depression because of a condition. | Your child underwent a procedure which was performed by a legally qualified medical practitioner. | A Medicare benefit is not payable for the treatment.