Private ruling: Net Medical Expenses Tax Offset
Date of advice: 9 August 2016
Published: September 2016
Ruling period: Year ending 30 June 2016 | This scheme commenced on: | 1 July 2015

Ruling: Questions and answers: | 1. Are you entitled to claim the Net Medical Expenses Tax Offset (NMETO) for your prescriptions relating to your medical conditions? | No. | 2. Are your prescriptions disability aids in respect to the requirements of the NMETO? | No.

Relevant facts and circumstances: You have medical conditions. You require a number of prescriptions. The prescriptions keep you alive.

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

Reasons for decision: Summary: Section 159P of the ITAA 1997 provides the conditions for claiming the NMETO. As of 1 July 2015 you are only able to claim the NMETO if you have claimed the offset in the 2013-14 and 2014-15 income periods. The exception to this is if the expense relates to an aid for a person with a disability, relates to a service rendered by a person as an attendant of a person with a disability or relates to care provided by an approved provider under the Aged Care Act 1997 . The schedule 3 of the explanatory memorandum for the Tax and Superannuation Laws Amendment (2014 Measures No. 1) Act 2014 provides some overview as to what a disability aid is. The act states: Whether an expense is related to disability aids, attendant care or aged care will largely be a matter of fact and circumstance. During the phase-out period, additional guidance will be provided by the Australian Taxation Office to assist people with determining whether their expense is eligible to be claimed under the NMETO The concept of a disability aid , for the purpose of these amendments, is intended to mean an instrument, apparatus, assistance device or any other item of property that is manufactured as, distributed as, or generally recognised to be, an aid to the function or capacity of a person with a disability. This provides examples of aids such as wheel chairs or maintenance of guide dogs and as such the prescriptions you require for your medical conditions do not meet this definition. There is no doubt that you have medical conditions however, for the purposes of the NMETO your prescriptions are not a disability aid. Therefore your out-of-pocket medical expenses are not eligible medical expenses for the purposes of the NMETO and you are not entitled to make a claim.