Private ruling: Medical expenses tax offset
Published: March 2014
Ruling period: Year ending 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Is the cost to purchase and install a wheelchair hoist to your car roof an eligible medical expense? | A1: Yes. | Q2: Is the cost to purchase and install a wheelchair lift in your home an eligible medical expense? | A2: Yes. | Q3: Is the cost of building alterations done in conjunction with the installation of the wheelchair lift an eligible medical expense? | A3: No.

Relevant facts and circumstances: You have been diagnosed with a condition, and as a result you rely on a wheelchair for mobility. Your legally qualified medical practitioner has prescribed the use of a wheelchair hoist and wheelchair lift. You have paid for wheelchair hoist and its installation costs. This hoist is sold specifically to allow a wheelchair to be lifted onto the roof of a car. You are in the process of having a wheelchair lift installed at your home. This is to enable you to access your home without assistance. The amount you will pay includes the wheelchair lift, its installation and some minor building alterations to your home.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 159P | Income Tax Assessment Act 1936 Subsection 159P(1) | Income Tax Assessment Act 1936 Subsection 159P(4) | Income Tax Assessment Act 1936 Paragraph 159P(4)(f)

Reasons for decision: Summary: A medical expenses tax offset is available under subsection 159P(1) of the Income Tax Assessment Act 1936 (ITAA 1936) where the taxpayer pays eligible medical expenses in an income year for themselves or a dependant who is an Australian resident. The medical expenses tax offset is only available if the amount of medical expenses, after being reduced by any entitlement to reimbursement from a health fund or government authority such as Medicare, exceeds the threshold amount. This includes any financial assistance received under a State/Commonwealth government funded program. The amount of net medical expenses tax offset you can claim now depends on your level of income as the rebate is now income tested. This not only affects the threshold amount but also the percentage of the rebate you can claim. It should also be noted that the threshold amount is subject to indexation and will change in future income years. Subsection 159P(4) of the ITAA 1936 defines medical expenses which are eligible for the medical expenses tax offset. Paragraph (f) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 includes payments made in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner. Taxation Ruling TR 93/34 Income tax: medical expense rebate - meaning of medical or surgical appliance explains the meaning of a 'medical or surgical appliance' as being an instrument, apparatus or device which is manufactured, distributed or generally recognised as an aid to the function or capacity of a person with a disability or an illness. This definition looks to the character of the appliance, not the purpose for which it is prescribed or used. It is not sufficient that a medical practitioner prescribes an appliance for medical or surgical ends. Wheelchair lift and building alterations The wheelchair lift has been manufactured, is sold specially and is generally recognised as an aid to those people who have mobility impairment. Its character is to aid a mobility impaired person overcome obstacles such as staircases. The purchase and use of the wheelchair lift was prescribed by your legally qualified medical practitioner and you use it as an aid to your mobility within your home. The wheelchair lift meets the requirements of a 'medical or surgical appliance'. However, the costs attributed to the building alterations done in conjunction with the installation of the wheelchair lift are separate and distinct from the purchase and installation costs. Building alterations are not considered to be medical expenses for the purpose of the medical expenses tax offset. Therefore, you can only include the cost of the purchase and installation of the wheelchair lift in your calculation for your eligibility to the medical expense tax offset. Wheelchair hoist The wheelchair hoist is manufactured specifically to allow a wheelchair to be lifted onto the roof of a vehicle. It allows you to performing activities of daily living, that is, being able to transport your wheelchair with you as a wheelchair bound motorist without assistance. The purchase and use of the wheelchair lift has been prescribed by your legally qualified medical practitioner. The wheelchair hoist meets the requirements of a 'medical or surgical appliance'. Therefore, you can include the purchase and installation costs in your calculation for your eligibility to the medical expenses tax offset.