Private ruling: Medical expenses tax offset
Published: May 2014
Ruling period: Year ended 30 June 213
Date scheme commenced: 1 July 2012

Ruling: Q1: Is the cost of a lift considered an eligible medical expense for the purposes of the medical expenses tax offset? | A1: Yes. | Q2: Is the cost of an automatic swing door operator considered an eligible medical expense for the purposes of the medical expenses tax offset? | A2: No.

Relevant facts and circumstances: You are an Australia resident for tax purposes. You have been diagnosed as suffering from a medical condition, and as a result you confined to a wheelchair. Your legally qualified medical specialist has prescribed the use of the lift and automatic door opener. You have purchased a lift which has been installed at your home. This is to enable you to access the second floor of your home without assistance. The lift is fully compliant with Australian standard AS 1735.16 (Lifts for persons with limited mobility - restricted use - automatically controlled). This lift is manufactured and sold for disability access only. You have purchased an automatic swing door operator, which has been fitted to your front door. You are able to remotely operate your front door and it assists you to enter and exit your home safely without assistance. Automatic swing door operators are not manufactured, distributed or generally recognised to be a disability aid. The item is commercially available and can be configured for various door applications.

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. Lift The 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 lift was prescribed by your legally qualified medical practitioner and you use it as an aid to your mobility within your home. The lift meets the requirements of a 'medical or surgical appliance'. Therefore, you can include the purchase cost in your calculation of the medical expenses tax offset. Automatic swing door operator Automatic swing door operators are not manufactured, distributed or generally recognised to be a disability aid. The item is commercially available and can be configured for various door applications. While it is acknowledged that the fitting of this device to your front door enables you to safely enter and exit your home without assistance the primary function is to open and close a door. This item is not considered to be an eligible medical expense for the purposes of the medical expense tax offset and you are not entitled to include the cost in your calculation of the medical expenses tax offset.