Private ruling: Medical expenses tax offset
Published: September 2014
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to a medical expenses tax offset (METO)? | A1: No.


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

Reasons for decision: Summary: On 14 May 2013, the government announced in the 2013-14 Budget that it will phase out the net METO. From 1 July 2013, those taxpayers who received the offset in their 2012-13 income tax assessment will continue to be eligible for the offset for the 2013-14 income year if they have eligible out-of-pocket medical expenses above the relevant claim threshold. Similarly, those who receive the tax offset in their 2013-14 income tax assessment will continue to be eligible for the offset in 2014-15. For the 2013-14 to 2018-19 financial years, an amount that would otherwise be paid as medical expenses is treated as not being paid as medical expenses unless the payment is related to an aid for a person with a disability, aged care or attendant costs for a person with a disability. In your case, you did not receive a medical expenses tax offset in the 2012-13 financial year. Furthermore, you would not have been entitled to receive a tax offset because your taxable income was less than the tax free threshold. Therefore, you would only be entitled to a METO in the 2013-14 financial year if you had eligible expenses over the claim threshold of $2,162 that relate to an aid for a person with a disability, aged care or attendant care. In your case, you incurred expenses for disability aids. It is accepted that you have a disability, and the aids relates to an aid for a person with a disability. However, as your out-of-pocket expenses for the aids are less than the claim threshold, you are not entitled to a METO.

Relevant facts: You did not claim a medical expenses tax offset for the 2012-13 financial year. | Your taxable income for the 2012-13 financial year was less than the tax free threshold. | Your income for the 2013-14 financial year is less than $88,000. | Your spouse claimed the METO in the 2012-13 financial year. | Your spouse died during the 2013-14 financial year. | You incurred expenses for disability aids in the 2013-14 financial year. However, these expenses were less than the claim threshold.