Private ruling: Medical expense tax offset
Published: October 2011
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are the costs of dental treatment for your spouse included as medical expenses for the purpose of calculating the medical expenses tax offset? | A1: Yes

Relevant facts and circumstances: You and your spouse are residents of Australia for income tax purposes. As a result of an accident your spouse had crowns fitted to replace teeth which had been knocked out. The crowns became infected and they had substantial dental work performed to correct the problem. The most viable option was to implant the replacement teeth. This procedure involved surgery to remove the infected crowns, transfer cartilage to the jaw and insert the implants. Your health fund only paid part of the costs incurred in the 2010-11 income year.

Relevant legislative provisions: 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 under subsection 159P(1) of the Income Tax Assessment Act 1936 (ITAA 1936) where a taxpayer pays 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. A spouse is a dependant for the purposes of this section. Subsection 159P(4) of the ITAA 1936 defines medical expenses which are eligible for the medical expenses tax offset and includes payments made to a legally qualified dentist for dental services or treatment or the supply, alteration or repair of artificial teeth. Dental services or treatment which are performed solely for cosmetic reasons are ineligible medical expenses and are not included in the calculation of the offset. A cosmetic dental service or treatment is one which beautifies or changes a person's appearance and is designed to effect a superficial alteration while keeping the basis unchanged. In your case, your spouse has had a series of dental procedures performed on their teeth which became necessary because of an accident and later infection of the area. It is considered that whilst some of the dental work may have been cosmetic the treatment given to your spouse was primarily concerned with the correction of a dental problem and was not conducted solely for cosmetic reasons. Accordingly you are entitled to include the costs of the dental treatment in the calculation of your medical expenses tax offset.

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