Private ruling: Deductibility of medical expenses
Date of advice: 30 October 2025
Published: 22 December 2025
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for your medical expenses? | A1: No.

Relevant facts and circumstances: After having exhausted all conservative management options, you were referred for surgical management in August 20XX. Your first consultation was with another Doctor during the relevant income year. You required two major surgeries, the first to remove your existing prostheses and then new custom alloplastic joints were placed. You have provided supporting documentation including doctor's consult notes and invoices. Your explanation of how your medical expenses were incurred in gaining or producing your assessable income and were not of a private or domestic nature was - "the loss is found in what produces assessable income i.e. myself, with revised alloplastic joint replacements the occasion of the loss."

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1

Reasons for decision: Summary: For a deduction to satisfy the requirements of section 8-1 of the ITAA 1997, the expense must have the essential character of an outgoing incurred in gaining assessable income or, in other words, of an income producing expense. To claim a deduction the expense must be incurred in earning your assessable income. You cannot claim an expense that is capital, private or domestic in nature. Generally, medical expenses have no direct connection to the gaining or producing of assessable income. The Commissioner published a Taxation Ruling IT 2217 Income tax deductions: medical appliances (IT 2217) which explains that medical expenditure is not an allowable deduction where a taxpayer is required to use some type of medical appliances or surgical appliance to overcome a physical disability. This would include wheelchairs, hearing aids, spectacles, artificial limbs, and similar appliances used by a taxpayer in carrying out their duties. In Taxation Ruling TR 95/15 Income tax: nursing industry employees - allowances, reimbursements and work-related deductions (TR 95/15) at paragraph 91, a nurse tried to claim the expense of their compression stocking on the grounds that they were prescribed by a medical practitioner to assist in overcoming a medical condition. The purchase of the stockings was classed as private in nature and was not incurred in earning her assessable income as a nurse. In your case your issue affected your ability to produce assessable income but claims for tax deductions in respect of expenses incurred on medical appliances used by taxpayers in their personal life, as well as to carry out their income earning duties, are not allowable as a deduction. They are a private expense. We acknowledge that your issue hindered your performance which is crucial in your profession. However, the fact that you are better able to earn your assessable income because of the surgeries does not alter the essential character of the expense. That is the expense being a medical expense which is private in nature. Consequently, the expenditure is not deductible under section 8-1 of the ITAA 1997.