Private ruling: Medical expenses tax offset
Published: November 2011
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Does the cost to purchase the electric adjustable hospital bed for your spouse qualify as a medical expense for the purpose of the medical expenses tax offset? | A1: 


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

Reasons for decision: Summary: A medical expenses tax offset is available to a taxpayer under section 159P 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. For the income year ending 30 June 2012, a taxpayer may claim a tax offset equal to 20% of the net medical expenses paid in the year of income in excess of $2,060. Net medical expenses are the medical expenses a taxpayer has paid less any refunds they received, or could have received, from Medicare or a private health fund. Subsection 159P(4) of ITAA 1936 defines a dependant to include the spouse of the taxpayer. Accordingly, your spouse is a dependant for the purposes of subsection 159P(4). Paragraph 159P(4)(f) of the ITAA 1936 defines medical expenses to include payments made in respect of a 'medical or surgical appliance' prescribed by a legally qualified medical practitioner. Taxation Ruling TR 93/34 explains that a 'medical or surgical appliance' for the purposes of paragraph 159P(4)(f) of the ITAA 1936 is an instrument, apparatus or device which is manufactured as, or distributed as, or generally recognised to be an aid to the function or capacity of a person with a disability or illness. Further, an appliance is an aid to function or capacity if it helps a person in performing activities of daily living. In considering whether an item is a 'medical or surgical appliance' it is the character of the item that is determinative, not the purpose for which it is prescribed or used, and in general, a household or commercial appliance is not a 'medical or surgical appliance'. Although an adjustable bed's modification has some elements of a medical or surgical appliance because it aids the function of a person with a disability or illness, its character remains, in essence, a piece of household furniture. Despite its modification the adjustable bed is still a bed. This item has a conventional household use and is not a medical or surgical appliance. As the electric adjustable hospital bed you purchased is not considered a 'medical or surgical appliance', it does not qualify as a medical expense and therefore you can not include the cost of the item when calculating your eligibility for the medical expenses 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. | Relevant facts: You and your spouse are residents of Australia for tax purposes | Your spouse suffers from an illness and is incapable of independent movement and is mostly confined to a bed and chair. | Your spouse has been assessed by the Department of Health and Ageing and is approved to receive residential care, and respite care, at a high level. | You purchased an electric adjustable hospital bed and mattress in the 2011-12 financial year. | You advise that as your spouse is unable to move independently, the electric adjustable hospital bed has become necessary to assist you to care for them as it allows you to move them without too much exertion on your part. | You advise that the bed is also important to your own well being as it alleviates the health risks to your back through heavy lifting.