Private ruling: Medical expenses tax offset
Published: June 2012
Ruling period: Year ended 30 June 2012 | Year ended 30 June 2013 | Year ended 30 June 2014 | Year ended 30 June 2015
Date scheme commenced: 1 July 2010

Ruling: Q1: Do the expenses you incurred in purchasing shoes to fit your orthotics in to qualify as medical expenses for the purposes of the medical expenses tax offset? | A1: No.

Relevant facts and circumstances: You were referred to a podiatrist by a medical practitioner. You have a medical condition which requires the use of orthotics and physiotherapy. You wear orthotics which requires a special neutral shoe to align the foot into a neutral position. The shoes were purchased from a retail store. Several pairs have been purchased and the retail store is the only place the neutral shoe can be purchased from. The podiatrist removes the inner sole of the shoe and replaces it with a custom made orthotic.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 159P.

Reasons for decision: Summary: Section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a tax offset is allowable to a taxpayer whose net medical expenses (that is, medical expenses less any amount paid or payable by Medicare or any other fund) in the year of income exceed a certain threshold. For the year ended 30 June 2012, the amount of the tax offset is 20% of the excess of net medical expenses over the threshold of $2,060. 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 distributed 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 purpose 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. In your case, you have purchased shoes from a retail store. The shoes were not specifically made for you, but are available to anybody to purchase. They were not manufactured as, or distributed as, or generally recognised to be an aid to the function or capacity of a person with a disability or illness. The shoes have a conventional use. That is, they are designed for use by the general population rather than specifically as an aid for use by persons suffering a disability or illness. The costs that you incurred in purchasing the shoes do not qualify as medical expenses under subsection 159P(4) of the ITAA 1936. You are therefore not entitled to a medical expenses tax offset for this expenditure.

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