Private ruling: Medical expenses
Date of advice: 16 September 2015
Published: September 2015
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 20XX

Ruling: Q1: Can you include the costs of your eye operations, glasses or visits to eye specialists in your medical expenses tax offset calculation? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 159P

Reasons for decision: Summary: A medical expenses tax offset is available under subsection 159P(1) of the Income Tax Assessment Act 1936 (ITAA 1936) where you pay certain medical expenses in an income year for yourself or a dependant who is an Australian resident, to the extent that you are not reimbursed, or are eligible to be reimbursed, from a government or public authority or a society, association or fund. Under changes to the legislation, the medical expenses tax offset is being phased out. To be eligible to claim a medical expenses tax offset in 2014-15, you must have either: • received this offset in your 2012-13 and 2013-14 income tax assessments, or • paid for medical expenses relating to disability aids, attendant care or aged care. In your case you did not receive a medical expenses tax offset in the 2012-13 and 2013-14 financial years. We therefore need to consider whether your expenses relate to disability aids. Subsection 159P(1B) of the ITAA 1936 states that: For the 2013-14 to 2018-19 years of income, an amount that would otherwise be paid as medical expenses is treated as not being paid as medical expenses unless the payment: (a) relates to an aid for a person with a disability; or (b) relates to services rendered by a person as an attendant of a person with a disability; or (c) relates to care provided by an approved provider (within the meaning of the Aged Care Act 1997 ) of a person who: (i) is approved as a care recipient under that Act; or (ii) is a continuing care recipient within the meaning of that Act. A person who is considered to be disabled is entitled to claim the cost of a disability aid towards meeting the net medical expense relevant threshold. Tax and Superannuation Laws Amendment (2014 Measures No.1) Act 2014 amended section 159P of the ITAA 1936 to phase out the 'Net Medical Expense Tax Offset'. As highlighted in the Explanatory Memorandum to the amending legislation, whether an expense is related to disability aids will largely be a matter of fact and circumstance. The concept of a 'disability aid', for the purpose of these amendments, is intended to mean an instrument, apparatus or device that is manufactured as, distributed as, or generally recognised to be, an aid to the function or capacity of a person with a disability. Examples include wheelchairs, walking frames, hearing aids and car controls for the disabled. The cost of prescription glasses is not considered to be a disability aid for the purposes of the medical expense tax offset. In your case, you made payments in relation to visiting eye specialists and eye operations. It is not considered that these payments were in relation to a disability aid. We acknowledge your particular situation however the current legislation does not allow a medical expenses tax offset for your out-of-pocket expenses for your visits to the eye specialists, glasses or operations. Therefore the costs are not considered to be eligible medical expenses for the purposes of the medical expenses tax offset.

Relevant facts: You developed problems with your vision. | You visited the optician and purchased new glasses. The new glasses didn't help with your vision. | You visited eye specialists and consequently had X operations to insert a lens into each eye. Subsequently you purchased new glasses and you no longer had problems with your vision. | You incurred costs in relation to the above. | You did not claim a medical expenses tax offset in the relevant financial years.