Private ruling: Therapeutic medical expenses tax offset
Published: November 2012
Ruling period: Year ended 30 June 2010 | Year ended 30 June 2011 | Year ended 30 June 2012
Date scheme commenced: 1 July 2009

Ruling: Q1: Can the cost of treatment at an overseas clinic be included as a medical expense for the purpose of calculating a medical expenses tax offset? | A1: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1936 Section 159P.

Reasons for decision: Summary: The term 'medical expenses' is defined in subsection 159P(4) of the Income Tax Assessment Act 1936 (ITAA 1936), and includes such payments made for therapeutic treatment administered by direction of a legally qualified medical practitioner. In Case R95 (1984) 27 CTBR (NS) 1154; 84 ATC 633, the Tribunal found that 'therapeutic treatment' necessitated the exercise of professional skill in the medical field in some positive way, which would normally involve the person undertaking the act of administering the treatment using chemical agents or drugs or a physical or mental process of one kind or another in a manner that is directed towards the cure or management of disease or of diseased patients. Therapeutic treatment is administered by direction of a legally qualified medical practitioner when the treatment is undergone as part of the medical practitioner's care of the patient. Furthermore, therapeutic treatment as a concept is concerned with healing or curing, rather than preventing the need for therapy (18 TBRD Case T67 ; 14 CTBR (NS) Case 31 ). Although the treatment must be administered by direction of a legally qualified medical practitioner, the treatment need not be administered by such a practitioner. In your case, after seeing specialists in Australia, you were referred to the practitioner overseas by your treating physician, who prescribed the procedures by the overseas specialist. The specific specialist at that practice works to administer the prescribed treatment. The treatment at the overseas clinic is considered to be therapeutic treatment administered by a legally qualified medical practitioner. Therefore the payments for this treatment are eligible medical expenses under section 159P of the ITAA 1936. Subsection 159P(3A) of the ITAA 1936 provides that a tax offset is allowable to a taxpayer whose eligible medical expenses (reduced by any entitlement to reimbursement from a health fund or government authority) in the year of income exceed the threshold. The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed the relevant threshold. The relevant threshold for the 2009-10 income year was $1,500. For the 2010-11 income year, the threshold was $2,000. For the 2011-12 income year, the threshold was $2,060.

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. | You were referred by a legally qualified medical practitioner for treatment by a medical practitioner at an overseas clinic. | You were referred to the overseas clinic as they specialise in the treatment of your medical condition. | Your referring doctor has ongoing involvement with your treatment plan from the clinic, has monitored your treatment there, and sees you to review your condition on a regular basis.