Private ruling: Medical expenses tax offset
Published: August 2012
Ruling period: Year ending 30 June 2012 | Year ending 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015
Date scheme commenced: 1 July 2011

Ruling: Q1: Can the cost of a carer for your child be included as an eligible medical expense in the calculation of a medical expenses tax offset? | A1: No

Relevant facts and circumstances: You are an Australian resident for taxation purposes. Your child has been diagnosed with a disability. You use and pay for carer services during school holidays and weekends so that you can work or attend other tasks, spend quality time with family and friends and attend social and non social events. Your carers are registered respite carers and are not registered nurses. All payments are made direct to these providers and you have received no reimbursements from Medicare or a private health provider. Carer's duties include feeding, toileting and any other personal care requirements including personal safety. Your child is not permanently confined to a bed or invalid chair or legally blind.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 159P.

Reasons for decision: Summary: A medical expenses tax offset is available to a taxpayer under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) where the taxpayer pays medical expenses in an income year for themselves or a dependant who is an Australian resident. Medical expenses are defined in subsection 159P(4) of the ITAA 1936. Paragraph (h) includes remuneration of a person for services rendered by them as an attendant of a person who is legally blind or permanently confined to a bed or an invalid chair. Subsection 159P(5) of the ITAA 1936 extends that definition to include employers (not being a public or private hospital) of relevant persons in respect of the provision of services or treatment by the relevant person, shall be taken to be a payment made to the relevant person. The term illness is not defined in the ITAA 1936 and therefore it is necessary to look at the ordinary meaning of the term. An illness includes a sickness, disease, or disorder of the body or the mind and involves a deviation from the normal healthy state. In your case, you use the services of carers to provide both respite and home care services for your child during school holidays and weekends so that you can work or attend to other tasks and spend quality time with your family and friends. You employ registered home carers who assist your child in daily living. These carers are not qualified nurses. Your child is not legally blind or permanently confined to a bed or invalid chair. You do not satisfy the specific criteria defined in paragraph 159P(4)(h) of the ITAA 1936 as your child is not legally blind or permanently confined to a bed or invalid chair. The payments made to your carers do not meet the definition of medical expenses for the purpose of the medical expenses tax offset. Therefore, you are not entitled to include the costs for carers in the calculation of your medical expense tax offset under section 159P of the ITAA 1936.

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