Private ruling: Medical examination expenses
Published: October 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to claim a deduction for the cost incurred in obtaining a medical certificate? | 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 states that you can deduct from your assessable income any loss or outgoing to the extent that it is incurred in gaining or producing your assessable income. You cannot claim a deduction if the loss or outgoing is of a capital, private or domestic nature. For a deduction to be allowed there must be sufficient nexus between the loss or outgoing and the assessable income. The expense must give rise to or help produce assessable income for it to be deductible. In TD 93/112 the Commissioner adopted the reasoning of Hill J in FC of T v Cooper (1990) 21 ATR 525; 90 ATC 4580, in that an employers requirement that an employee incur expenditure which is not related to the income-producing activities of that employee, does not convert the expenditure into a deductible outgoing. In your case you had applied for a job with a new employer and you were required to undergo a medical examination as the last stage of your application process. As the examination was conducted before you began employment, the costs were incurred in obtaining employment rather than incurred in gaining or producing your assessable income. The expense is therefore not deductible.

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 applied for a job with a new employer. | There were various stages to the application process and candidates for the job could only advance if they are successful at each stage prior. | The last stage of the application process was a medical examination. | You were informed by your new employer that your application for employment was successful, subject to a satisfactory medical certificate. | On production of this certificate were able to commence employment.