Private ruling: Medical expenses
Published: November 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 2011

Ruling: Q1: Is the expense incurred for aged care services an eligible expense for the purposes of the medical expenses tax offset? | A1: No. | Q2: Is the expense incurred for additional hours of aged care services an eligible expense for the purposes of the medical expenses tax offset? | A2: No.

Relevant facts and circumstances: You have been assessed as requiring permanent residential care at a low level. This can be provided by either moving into an aged care facility or by staying in your home and receiving a care package. At this stage you have decided with the concurrence of your doctor that you will stay in your home. You pay an amount per fortnight to a care provider. As you health is deteriorating, the package does not provide sufficient hours of care for your needs. With your doctor's agreement, the hours have been increased and are fully paid for by you. The home care attendants are not doctors or registered nurses. They are 'aged home care attendants'. The carers duties include house keeping duties such as cleaning, they also may assist with showering etc. You are not confined to a bed or wheelchair. You are not considered legally blind.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 159P(1), and | Income Tax Assessment Act 1997 section 159P(4).

Reasons for decision: Summary: A medical expenses tax offset is available to a taxpayer under sub-section 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 $2,060 for the 2011-12 income year. The term 'medical expenses' is defined in sub-section 159P(4) of the ITAA 1936. Paragraph (a) of the definition includes payments made to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation. Paragraph (h) includes remuneration of a person for services rendered by them as an attendant of a person who is blind or permanently confined to a bed or an invalid chair. Medical expenses also include payments made to a public or private hospital in respect of an illness. An aged care facility that is an approved provided under the Aged Care Act 1997 is considered to be a hospital for the purposes of subsection 159P(4) of the ITAA 1936. In your case, you require permanent residential care at a low level. Whilst we acknowledge that you require permanent residential care, you do not satisfy the specific criteria defined in paragraph (h) as you are not blind, or permanently confined to a bed or an invalid chair. Also your carers are not legally qualified medical practitioners or nurses and do not satisfy the criteria in paragraph (a). Although you live in a retirement village, the care you receive is provided by a healthcare company. The payments you make to receive care in your home are not considered to be made to a public or private hospital. Therefore, payments to an agency in respect of your care at home and payments for additional hours of aged care services, do not qualify as medical expenses for the purposes of the medical expenses tax offset.

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