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

Ruling: Q1: Does the cost of a diagnostic assessment and report qualify as a medical expense for the purpose of calculating a medical expenses tax offset? | A1: No. | Q2: Can you include the cost of an optometric vision report in a calculation a medical expenses tax offset? | A2: Yes.


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

Reasons for decision: Summary: A medical expenses tax offset is available under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where you pay medical expenses in an income year for yourself and/or a dependant who is an Australian resident. The medical expenses tax offset is only available if the amount of medical expenses (reduced by any entitlement to reimbursement from a health fund or government authority) exceeds the annual threshold. The tax offset is 20% of the amount by which the net medical expenses exceeds the annual threshold. Medical expenses are defined in subsection 159P(4) of the ITAA 1936 to include payments to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation (paragraph (a) of the definition) and the testing of eyes by a person legally qualified to perform those services as a medical expense (paragraph (g) of the definition). | Detailed Reasoning - Diagnostic Assessment and Report: Paragraph (d) includes in the definition of medical expense, a payment, 'for therapeutic treatment administered by direction of a legally qualified medical practitioner'. It was held in Case A53 69 ATC 313; (1969) 15 CTBR (NS) Case 30 that the mere suggestion or recommendation by a medical practitioner that the patient undergoes therapeutic treatment is not sufficient for the payment to qualify as medical expenses. The patient would have to be referred by a medical practitioner to a particular person for specific treatment. In your case, your child was not referred by a legally qualified medical practitioner and the payment was not made to a qualified medical practitioner. Therefore, the expense is not considered to be for therapeutic treatment and cannot be included in a calculation for a medical expenses tax offset. | Detailed Reasoning - Optometrist: You are entitled to include the cost of an optometric vision report in your claim for a medical expenses tax offset under paragraph (g) of the definition of medical expenses.

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: Your child underwent a diagnostic assessment and a report was made. | You were referred under your child's primary care enhanced plan which is administered by your child's school. | Your child also saw an optometrist who provided an optometric vision report.