Private ruling: Deduction for health insurance
Published: November 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for the cost of health insurance? | A1: No.


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

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income. Generally health insurance has no direct connection to the gaining or producing of assessable income as the purpose of the expense is insure you in the event you became ill. There is insufficient connection to the gaining or production of assessable income for a deduction to be allowed as the expenditure is too remote. While we accept that it was a condition of your employment that you held health insurance, the expense is not considered to be incurred in gaining your assessable income, but rather incurred in insuring you for illness or injury. Therefore, you cannot claim a deduction for the cost of health insurance as it does not relate to the earning of your assessable income.

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: You came to Australia holding a specific visa. | Your employer did not pay for your health insurance. However, they insisted that you took out a policy as a condition of your employment.