Private ruling: medical expenses
Published: July 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Do the costs of the QV bath oil qualify as a medical expense for the purposes of the medical expenses tax offset? | A1: Yes. | Q2: Do the costs of the bleach, salt and water qualify as a medical expense for the purposes of the medical expenses tax offset? | A2: No.

Relevant facts and circumstances: Your dependant has a chronic illness. As part of the treatment you give special baths approximately four times each week. This treatment was prescribed by a nurse practitioner. The treatment is ongoing. The bath treatment consists of bleach, QV bath oil, water and salt. The baths are pushing your water consumption up. You purchase the bleach and salt from a supermarket. You purchase the QV bath oil from the chemist.

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

Reasons for decision: Summary: Section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a tax offset is allowable to a taxpayer whose net medical expenses (that is, medical expenses less any amount paid or payable by Medicare or a private health fund) in the year of income exceed a certain threshold. To qualify for the tax offset the medical expenses must be paid by you in respect of yourself or your dependant. The amount of the tax offset is calculated as 20% of the excess of net medical expenses over the threshold of $2,060 for the 2011-12 income year. The term "medical expenses" is defined in sub-section 159P(4) of the ITAA 1936 and include payments: (a) to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation; or (d) for therapeutic treatment administered by direction of a legally qualified medical practitioner; or (f) in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner; In your case, you purchase the QV bath oil from a chemist. As the oil is in respect of an illness, the costs of the bath oil qualify as a medical expense under paragraph 159P(4)(a) of the ITAA 1936. Where medication is purchased from other outlets (for example, a health food store or supermarket), the expenses will only qualify as a medical expense if the treatment is therapeutic and administered by direction of a legally qualified medical practitioner (paragraph (d) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936). The costs of the bleach, salt or water are not therapeutic treatment administered by direction of a legally qualified medical practitioner. A nurse is not regarded as a medical practitioner for the medical expenses tax offset purposes. Therefore the costs of the bleach, salt or water do not qualify as a medical expense under paragraphs 159P(4)(a) or (d) of the ITAA 1936. Furthermore, as explained in Taxation Ruling TR 93/34, the bath is not regarded as a medical or surgical appliance for the purposes of the medical expenses tax offset. As highlighted in TR 93/34, a household or commercial appliance is not generally a medical or surgical appliance. We acknowledge the ongoing costs incurred in relation to your dependant's illness. However, the expenses incurred for the bleach, salt and water do not meet the definition of medical expenses for the purposes of the medical expenses tax offset. Accordingly the expenses incurred for the bleach, salt and water used in the bath can not be used in calculating any allowable medical expenses tax offset.

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