Private ruling: Medical expense tax offset
Published: November 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are the costs of purchasing various items used for treatment a medical expense for the purposes of the medical expenses tax offset? | A1: No.

Relevant facts and circumstances: Your dependent has a medical disorder. They receive professional medical treatment. The medical condition requires specific treatments in order to manage and improve the outcomes in various environments. It was recommended that you purchase a number of items and materials to assist with the treatment.

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

Reasons for decision: Summary: A medical expenses tax offset is available to a taxpayer under subsection 159P(1) of the Income Tax Assessment Act 1936 (ITAA 1936), where the taxpayer pays medical expenses in an income year for themselves or a dependant who is an Australian resident, to the extent that they are not reimbursed, or are eligible to be reimbursed, from a government or public authority or a society, association or fund. Medical expenses are defined in subsection 159P(4) of the ITAA 1936. Paragraph (d) of the definition of medical expenses includes payments for therapeutic treatment administered by direction of a legally qualified medical practitioner. Therapeutic treatment not formally prescribed by a doctor but rather undertaken on the basis of a mere suggestion or recommendation by a doctor to the patient is not enough for the treatment to qualify. The patient must be referred to a particular person for a specific treatment ( Case A53 69 ATC 313, 15 CTBR (NS) Case 30). In Case R95 84 ATC 633; 27 CTBR (NS) Case 148, the Administrative Appeals Tribunal found that therapeutic treatment necessitated the exercise of professional skill in the medical field. This would normally involve the person administering the treatment using chemical agents or drugs or some physical and mental process which are directed towards the cure or management of a disease or aliment. Therefore, therapeutic treatment is concerned with healing or curing, rather than preventing the need for therapy. Paragraph (f) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 also includes payments in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner. Taxation Ruling TR 93/34 explains the meaning of a medical or surgical appliance for the purposes of the medical expenses tax offset. The ruling states that a medical or surgical appliance is an instrument, apparatus or device which is manufactured as, or attributed as, or generally recognised to be an aid to the function or capacity of a person with a disability or an illness. This definition looks to the character of the appliance, not the purposes for which it is prescribed or used. TR 93/34 states that it is not sufficient that a medical practitioner prescribes an appliance for medical or surgical ends, and that generally, a household or commercial appliance is not a medical or surgical appliance. Paragraph 7 of TR 93/34 includes also that the mere fact that an item gives therapeutic treatment, in that relieves, heals or prevents a medical condition, does not make it a medical or surgical appliance. In your case, you have incurred expenses relating to the purchase of various household and/or commercial items used to help with the treatment. Although the items may be used in conjunction with the treatment, they are not manufactured as, distributed as, or generally recognised to be an aid to the function or capacity of a person with an illness or disability. Therefore, the cost of these items purchased is not considered medical or surgical appliances nor do they satisfy the definition of therapeutic treatment for the purposes of the medical expenses tax offset. Therefore, the expenses you incurred for purchasing the items are not eligible medical expenses for the purposes of medical expenses tax offset.

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