Private ruling: Medical expense tax offset
Published: January 2012
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are amounts paid to a carer in order to assist a dependant child with a disability to attend school allowable as expenses for the purpose of calculating the medical expense tax offset? | A1: Yes

Relevant facts and circumstances: Your dependant child has a diagnosed muscular disability In order for the child to attend school, a carer was recommended by a legally qualified medical practitioner. Half the cost of the carer is paid by you. You have forwarded a letter in which the doctor notes that your child is unable to mobilise normally and needs a wheelchair for this purpose.

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

Reasons for decision: Summary: A medical expenses tax offset is available under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) where you incur medical expenses in an income year for yourself and/or a dependant who is an Australian resident. The tax offset is only available if the net amount of medical expenses remaining after any entitlement to reimbursement from a health fund or government authority has been deducted exceeds $2,000. The tax offset is 20% of the amount by which the net medical expenses exceed $2,000. Medical expenses are defined in section 159P(4) of the ITAA 1936 to include payments made to a person providing services as an attendant of a person who is blind or permanently confined to a bed or invalid chair (paragraph (h) of the definition). In your case your child is unable to move to any reasonable extent without the aid of a wheelchair. The child's mobility is therefore limited in that basic needs cannot be attended to without the assistance of the chair. In this respect it is considered that the child is permanently confined to an invalid chair and therefore the cost of an attendant to provide your child with assistance would be an eligible medical expense for the purposes of claiming the medical expense tax offset.

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