Private ruling: Medical expenses tax offset
Date of advice: 2 December 2016
Published: May 2017
Ruling period: Year ending 30 June 20YY
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to claim a medical expense tax offset? | A1: No

Relevant facts and circumstances: You have a dependent child who has been diagnosed with a disease. You have incurred expenses for specialised therapy for your dependent child.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 159P Explanatory Memorandum to the Tax and Superannuation Laws Amendment (2014 Measures No. 1) Bill 2014

Reasons for decision: Summary: Section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) allows a tax offset for a percentage of the cost of net medical expenses above the relevant threshold. From the 2015-16 financial year onwards, you can only claim the tax offset if you have incurred expenses relating to: ● An aid for a person with a disability ● An attendant of a person with a disability; or ● Care provided by an approved provider to a care recipient. A disability is defined as a restriction or impairment which has lasted, or is likely to last, for a period of six months or more, and which restrict a person's everyday activities. This includes blindness, deafness, chronic physical pain, breathing difficulties, incomplete use of limbs or digits, long-term effects of head injury or stroke, restriction in physical activities or work and the like. The Explanatory Memorandum to the Tax and Superannuation Laws Amendment (2014 Measures No. 1) Bill 2014 defines disability aids as follows: Disability aids 3.27 The concept of a disability aid …. 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. A disability aid would be considered to be an aid to function or capacity if it helps a person in performing activities of daily living or provides assistance to alleviate the effect of the disability. However, generally speaking, an ordinary or general household or commercial appliance is not a disability aid even if it helps a disabled person. In your case you have incurred expenses for specialised therapy for your dependent child. This is not be considered to be a disability aid in accordance with the above definition as it is not a device or apparatus manufactured or generally recognised as an aid in the function or capacity of a disabled person. Disability aids include items such as wheelchairs, hearing aids, oxygen tanks, mobility aids and walkers, and prosthetic limbs. The expenses you have incurred therefore do not allow you to claim a medical expenses tax offset. The ATO Interpretive Decision ATO ID 2001/182 has been withdrawn, as the previous definition of medical expenses only applied up to and including the 2014-15 financial year.