Private ruling: Medical expenses tax offset
Published: October 2011
Ruling period: Year ended 30 June 2010
Date scheme commenced: 1 July 2009

Ruling: Q1: Are you entitled to a medical expenses tax offset for the cost of installing and maintaining a hydrotherapy spa pool at your private residence? | A1: No

Relevant facts and circumstances: You are an Australian resident for tax purposes. Your dependant spouse has been diagnosed with medical condition for which there is no cure. Your spouse's doctor has advised regular hydrotherapy exercises as treatment to alleviate the pain. Your spouse has had access to the closest facility some distance drive away to help with alleviating the symptoms. There is limited public transport and your spouse has been unable to get there often enough and is too weak after the sessions to drive home. You have installed a hydrotherapy spa pool which is solely used for your spouse to help with the treatment of the medical condition.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 159P | Income Tax Assessment Act 1936 Subsection 159P(4).

Reasons for decision: Summary: The costs of installing a hydrotherapy spa pool at your private residence to assist in the management of your spouses' medical condition does not qualify as medical expenses for the purposes of the medical expenses tax offset. | Detailed Reasoning - Detailed reasoning: Section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) allows a medical expenses tax offset if you incur medical expenses in an income year or for a dependant who is an Australian resident. Subsection 159P(4) of the ITAA 1936 defines 'medical expenses' as payments made in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner (paragraph (f) of the definition). Taxation Ruling TR 93/34 explains the meaning of a 'medical or surgical appliance' as an instrument, apparatus or device which is manufactured as, distributed as or generally recognised to be an aid to the function or capacity of a person with a disability or an illness. Paragraph 7 of TR 93/34 states that the mere fact that an item gives therapeutic treatment, in that it relieves, heals, or prevents a medical condition, does not make it a 'medical or surgical appliance'. Paragraph 9 of TR 93/34 lists items which are not medical or surgical appliances. Hydrotherapy and spa pools are listed at items (k) and (l). Pools of any description are not medical or surgical appliances as they do not aid function or capacity and they are not manufactured or distributed as, or generally recognised to be an article or thing intended to achieve a medical or surgical end. Under subsection 159P(4) of the ITAA 1936, paragraph (d) of the definition of 'medical expenses' includes payments made for therapeutic treatment administered by direction of a legally qualified medical practitioner. In Case R95 84 ATC 633, the Tribunal found that 'therapeutic treatment' necessitated the exercise of professional skill in the medical field in some positive way, which would normally involve the person undertaking the act of administering the treatment using chemical agents or drugs or a physical or mental process of one kind or another in a manner that is directed towards the cure or management of disease or of diseased patients. Your spouse's doctor has advised to undertake hydrotherapy exercises to assist in the management of the medical condition. You have installed a hydrotherapy spa pool at your private residence for this purpose. Your spouse's hydrotherapy exercises are not being administered by a professional in the field. The expenditure you have incurred to install the hydrotherapy spa pool for your hydrotherapy exercises does not meet the definition of a medical expense. Therefore you are not entitled to claim a medical expenses tax offset for the cost of installing and maintaining a hydrotherapy spa pool under section 159P of the ITAA 1936.

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