Private ruling: Medical expenses tax offset
Ruling period: 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Do the items purchased on the recommendation of your occupational therapist qualify as 'medical expenses' for the purposes of the medical expenses tax offset? | A1: No. | Q2: Does the cost of the computer assistive technology assessment conducted by the occupational therapist team qualify as 'medical expenses' for the purposes of the medical expenses tax offset? | A2: No.

Relevant facts and circumstances: You have been diagnosed with a condition that affects all four of your limbs. You have difficulty maintaining an upright sitting position. Your disability affects your fine motor skills, which in turn impacts on your ability to participate in writing tasks, use a regular mouse and use a regular keyboard. You were referred to an occupational therapist team to investigate options for handwriting. You purchased a traxsys roller plus joystick. The function of this item is to provide an aid to a person with a disability affecting their fine motor skills. The joystick is used as a replacement to the regular computer mouse. You purchased a couple of software programs to assist with developing your skills with using the mouse, improve your literacy skills and numeracy awareness. You purchased a height adjustable desk to ensure an ergonomic setup for any seating system that you choose to use whilst at the desk. All of these items were purchased on the recommendation of the occupational therapist team. You have also incurred expenses from the occupational therapist team for assessing your assistive technology needs. You have not been reimbursed for any of these expenses.

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

Reasons for decision: Summary: The cost associated with the traxsys roller plus joystick, computer software, height adjustable desk and the computer assistive technology assessment do not satisfy the requirements of eligible medical expenses. Therefore, you are not entitled to a medical expenses tax offset for the cost of these items. | Detailed Reasoning - Detailed reasoning: 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. The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed $2,000 for the income year. Medical expenses are defined in subsection 159P(4) of the ITAA 1936 to include payments: a. to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation; or 1. to a legally qualified dentist for dental services or treatment or the supply, alteration or repair of artificial teeth; or 2. to a person registered under a law of a State or Territory as a dental mechanic in respect of charges lawfully made by that person for the supply, alteration or repair of artificial teeth; or 3. for therapeutic treatment administered by direction of a legally qualified medical practitioner; or 4. in respect of an artificial limb (or part of a limb), artificial eye or hearing aid; or 5. in respect of a medical or surgical appliance (not otherwise specified in this definition) prescribed by a legally qualified medical practitioner; or 6. for: i. the testing of eyes or the prescribing of spectacles by a person legally qualified to perform those services; or ii. the supply of spectacles in accordance with any such prescription; or 7. as remuneration of a person for services rendered by him as an attendant of a person who is blind or permanently confined to a bed or an invalid chair; or 8. for the maintenance of a dog used for the guidance or assistance of, but not social therapy for, a person with a disability, being a dog that the Commissioner is satisfied is properly trained in the guidance or assistance of persons with disabilities; But this does not include ineligible medical expenses. The first issue to be addressed in your case is whether an occupational therapist is a legally qualified medical practitioner. In Case U20 87 ATC 183, the Administrative Appeals Tribunal (AAT) held that a chiropractor and naturopath were not legally qualified medical practitioners as they were not qualified in terms of the requirements of the Medical Act in the relevant State. Also, in AAT Case Re VBI and FCT (2005) 59 ATR 1197; [2005] AATA 683, the AAT stated: Mr Anderson submitted on behalf of the applicant that a person registered under the Psychological Registration Act 2000 (Victoria) is a legally qualified medical practitioner . The psychologist here was so registered. There is no definition within the Act of a legally qualified medical practitioner . While the psychologist was registered, I am of the view that he is not a legally qualified medical practitioner as that term is generally accepted. The requirement is that the practitioner is qualified under the relevant legislation to practice medicine. A psychiatrist is so qualified but a psychologist is not. An occupational therapist is not legally qualified to practice medicine, that is, they are not a medical doctor. Therefore, an occupational therapist is not a legally qualified medical practitioner. In your situation you were referred to a team of occupational therapist to investigate options for your handwriting. On the recommendations from the occupational therapist team, you have incurred costs to purchase a traxsys roller plus joystick, computer software and a height adjustable desk. As previously discussed, an occupational therapist is not a legally qualified medical practitioner. Therefore, the costs of medical appliances prescribed by an occupational therapist do not satisfy the definition of 'medical expenses' for the purposes of the medical expenses tax offset. You have also incurred expenses related to the computer assistive technology assessment carried out by the occupational therapists team. Subsection 159P(4) of the ITAA 1936 provides a list of people and organisations whom payments must be made to in order for the costs to be considered an eligible medical expense. Payments made to occupational therapists are not included in this list and as such these costs do not satisfy the requirements of an eligible medical expense. Therefore the cost of the computer assistive technology assessment cannot be included in the calculation of a medical expenses tax offset. We acknowledge that the costs you have queried are related to your medical condition. However, the legislation setting out the eligibility for the medical expenses tax offset specifically defines 'medical expenses' for the purposes of the tax offset. As discussed above, the costs in question do not fall within any part of this definition and therefore do not qualify for the tax offset. The Commissioner has no discretion to include costs which do not meet the definition of 'medical expenses' as set out in the legislation.

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