Private ruling: Medical expenses tax offset
Published: August 2012
Ruling period: Year ending 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015 | Year ending 30 June 2016
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to include your medical centre fees when calculating your medical expenses tax offset? | A1: Yes.

Relevant facts and circumstances: You were in a motor vehicle accident a number of years ago. As a result of the accident you became permanently disabled. You are a resident of a medical centre. Until recently the insurance company paid for your care in the medical centre. After a lump sum payout you are now required to pay the medical Centre fees yourself. The following services are provided to you: · Assistance with bathing, shaving, toileting, dressing, undressing, fitting of sensory communication aids, feeding · Supervision of the taking of prescribed medications · Provision of rehabilitative support, including physiotherapy and occupational therapy · Provision of treatment such as eye drops, back rubs, dressings, and medical tests · Provision of attendant care for short-term illness's · Medical attention by registered medical practitioners · Provision and maintenance of your electric wheel chair · Provision of laundry services and facilities · Provision of room cleaning and bed making · Provision of emergency assistance on call

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

Reasons for decision: Summary: A medical expense tax offset is available to a taxpayer under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) where the taxpayer incurs medical expenses for themselves or a dependant who is an Australian resident. The term 'medical expenses' is defined in subsection 159P(4) of the ITAA 1936. Paragraph (h) of that definition includes payments 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. It is not necessary that the payments be made direct to the person performing the services, for example they can be made to an entity employing that person. The term attendant is not defined in income tax legislation. Accordingly, it is necessary to consider the ordinary meaning of the term. The Australian Oxford English Dictionary defines attendant as a person employed to wait on others or provide a service. The ordinary meaning of the term could arguably include a person who is employed to provide any service. However, the scope of the term attendant must be read within the context of paragraph 159P(4)(h) of the ITAA 1936, which provides that the payment must relate to the remuneration of a person for the services they provide as an attendant of a person. The requirement that the services be provided as an attendant of a person necessitates that the services provided by the attendant (to a person who is blind or permanently confined to a bed or an invalid chair) are primarily to assist the person with their personal care, for example bathing, washing, dressing, and feeding. You pay the medical Centre for the provision of your care which includes assistance with bathing, dressing and other personal care. The costs incurred by you in respect of residential and personal care services qualify as medical expenses for the purposes of the medical expenses tax offset under section 159 of the ITAA 1936. | Detailed Reasoning - Please note:: You can claim a tax offset of 20% of your net medical expenses over the set threshold. The threshold is indexed and changes each year. The threshold for the 2011-12 income year is $2,060. "Net medical expenses" are the medical expenses you have paid less any refunds you got, or could get, from Medicare or a private health fund.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.