Private ruling: Medical expenses tax offset
Published: November 2011
Ruling period: Year ended 30 June 2009 | Year ended 30 June 2010 | Year ended 30 June 2011
Date scheme commenced: 1 July 2008

Ruling: Q1: Does the cost of your treatment sessions qualify as an eligible medical expense for the purposes of the medical expenses tax offset? | A1: Yes

Relevant facts and circumstances: You are suffering from a medical condition. Your doctor has referred you to a specific person for treatment. As part of your treatment you attend regular sessions. Written reports on your progress are provided to your doctor. You have regular appointments with your doctor to monitor your condition.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 159P

Reasons for decision: Summary: 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 the threshold. For the 2010-11 financial year the threshold is $2,000. Please note that the threshold amount is subject to indexation and will change in future years. The definition of the term medical expense includes payments made for therapeutic treatment administered by direction of a legally qualified medical practitioner. Therapeutic treatment as a concept is concerned with healing or curing, rather than preventing the need for therapy. Therapeutic treatment involves the exercise of professional skill in the medical field in a way which normally involves the person administering the treatment using drugs or physical or mental processes of one kind or another for the purpose of curing or managing the disease or ailment Although the treatment must be administered by direction of a legally qualified medical practitioner, the treatment need not be administered by such a practitioner. In managing your medical condition, your legally qualified medical practitioner referred you to a specific person for treatment sessions. Written reports are provided to your doctor on your progress and you attend regular appointments with your doctor to monitor your condition. It is considered that the treatment sessions administered by direction of your medical practitioner are for therapeutic treatment. Therefore, the out of pocket expenses you have paid for, qualify as an eligible medical expense for the purposes of the medical expenses tax offset and you are entitled to include the unreimbursed costs in your calculation of the medical expense tax offset.

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.