Private ruling: Medical expenses tax offset
Published: March 2013
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Do the costs associated with maintaining your assistance dog qualify as eligible medical expenses for the purposes of claiming the medical expenses tax offset? | A1: Yes.

Relevant facts and circumstances: You suffer from a disability. You have a specifically trained accredited assistance dog. You have provided several documents that recognise your dog as an assistance dog. The documents provide you with exemption so that your dog may travel with you on different forms of public transport.

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) | Income Tax Assessment Act 1936 Paragraph 159P(4)(i)

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 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 Medicare and private health insurers. The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed the threshold. For the 2011-12 financial year the threshold is $2,060. Please note that the threshold amount is subject to indexation and from the 2012-13 financial year is also subject to income testing and this will change the threshold in future years. Subsection 159P(4) of the ITAA 1936 specifically defines medical expenses which are eligible for the medical expenses tax offset. Paragraph (i) of the definition includes payments for the maintenance of a dog used for the guidance or assistance of, but not social therapy for, a person with a disability, being a dog that the Commissioner is satisfied is properly trained in the guidance or assistance of persons with disabilities. As originally enacted, paragraph (i) applied only to dogs used for the guidance of a blind person. This was extended to dogs used for guiding and assisting people with a disability for the 2002-03 financial year and later financial years. Therefore, any expenses you have paid for the maintenance of your assistance dog qualify as an eligible medical expense within the meaning of subsection 159P(4) of the ITAA 1997 and you are entitled to include the cost in your calculation of the medical expenses tax offset.