Private ruling: Medical expenses offset
Date of advice: 19 September 2018
Published: November 2018
Ruling period: Year ended 30 June 2016 | Year ended 30 June 2017 | Year ended 30 June 2018
Date scheme commenced: 1 July 2015

Ruling: Q1: Are you entitled to the medical expenses tax offset? | A1: Yes

Relevant facts and circumstances: The deceased was in an aged care facility. The aged care facility was an approved provider within the meaning of the Aged Care Act 1997 . The deceased was an approved aged care recipient under the Aged Care Act 1997 . For the year ended 30 June 2016 the deceased paid $XXXX in means tested care fees, basic daily care fees, and daily accommodation fees. For the year ended 30 June 2017 fees paid totalled $XXXXX. For the year from 1 July 2017 until date of death fees paid totalled $XXXX.

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

Reasons for decision: Summary: A medical expenses tax offset is available under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where you have paid medical expenses in an income year for yourself and/or a dependant who is an Australian resident. The medical expenses tax offset is only available if the amount of medical expenses (reduced by any entitlement to reimbursement from a health fund or government authority such as Medicare) exceeds the threshold amount. Medical expenses are defined in subsection 159P(4) of the ITAA 1936 to include payments to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation (paragraph (a) of the definition). For the 2013-14 to 2018-19 years of income, an amount that would otherwise be paid as medical expenses is treated as not being paid as medical expenses unless the payment: (a) relates to an aid for a person with a disability; or (b) relates to services rendered by a person as an attendant of a person with a disability; or (c) relates to care provided by an approved provider (within the meaning of the Aged Care Act 1997 ) of a person who: (i) is approved as a care recipient under that Act; or (ii) is a continuing care recipient within the meaning of that Act. You meet the requirements under section 159P of the ITAA 1936 and are therefore entitled to the medical expenses tax offset.