Private ruling: Deductions
Date of advice: 27 November 2025
Published: 12 January 2026
Ruling period: DD MM 20YY
Date scheme commenced: DD MM 20YY

Ruling: Q1: Are you entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for the portion of your medical appointments incurred for obtaining medical reports in relation to the regular payments you receive under your income protection policy? | A1: Yes. The expenses you incurred relate directly to the earning of your assessable income and are therefore deductible under section 8-1 of the ITAA 1997. The amount deductible would be the difference between the amount paid and the amount received from Medicare (the out of pocket amounts). | Q2: Are you entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for the portion of your psychologist appointments incurred as required by your doctor and subsequently required by the insurer in relation to the regular payments you receive under your income protection policy? | A2: Yes. The expenses you incurred relate directly to the earning of your assessable income and are therefore deductible under section 8-1 of the ITAA 1997. The amount deductible would be the difference between the amount paid and the amount received from Medicare (the out of pocket amounts). | Q3: Are you entitled to a deduction under section 8-1 of the ITAA 1997 for the interest on the loan taken out for your legal expenses incurred to safeguard your employment from possible dismal? | A3: Yes. The interest on the loan taken out to cover the legal expenses incurred is not private or capital in nature and are therefore deductible under section 8-1 of the ITAA 1997.

Relevant facts and circumstances: You commenced employment with X (your employer) in MM 20YY as X. A dispute arose between you and your employer regarding performance, workplace culture and conduct. You have had a mental health treatment plan in place since MM 20YY. The payout is equivalent to a percentage of your existing salary and wages. You attend the appointments periodically to fulfil certain requirements to continue receiving assessable income protection payments, which included obtaining medical reports from your medical practitioners. The cost, of the appointment and the medical reports are not fully covered by Medicare. The sole purpose of these appointments is to fulfil the requirement of the policy.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1