Private ruling: Medical expenses tax offset
Ruling period: Year ending 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to a medical expense tax offset for the cost of your adjustable bed? | A1: 

Relevant facts and circumstances: You were diagnosed with a medical condition in 2010. You purchased an adjustable bed that allows you to electrically elevate your back or legs. It has helped you sleep better which has helped with your illness. You have supplied a letter from your medical practitioner recommending you seek better bedding or a better mattress to assist you with the control of your medical condition.

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).

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 incurs 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. Paragraph (f) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 includes as medical expenses 'payments made in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner'. Taxation Ruling TR 93/34 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. An appliance is an aid to function or capacity if it helps the person with the illness or disability to perform the activities of daily living. TR 93/34 also states that generally, a household or commercial appliance is not a 'medical or surgical appliance'; and that we need to look at the character of the appliance, not the purpose for which it is proposed or used. In your case you purchased a therapeutic adjustable bed. The bed allows you to electrically elevate your back or legs. Although the adjustable nature of the bed may aid the function of a person with a disability or illness, the bed itself retains its domestic function of being a place to sleep in a household setting. The character remains in essence a piece of household furniture. The bed has a conventional household use and is not a medical or surgical appliance. The costs that you incurred in purchasing the therapeutic adjustable bed do not qualify as medical expenses under subsection 159P(4) of the ITAA 1936. You are therefore not entitled to a medical expenses tax offset for this expenditure.

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