Private ruling: Tax offset - medical expenses
Published: August 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Does the purchase of the bed qualify as an eligible medical expense for the purpose of the medical expenses tax offset? | A1: No.

Relevant facts and circumstances: You suffer from back pain and shoulder pain . Your doctor recommended that you purchase special bedding and mattress to comfort you back and shoulder .

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

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 incur medical expenses in an income year for yourself or a dependant who is an Australian resident. The medical expense 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 $2,120 if you are single and your adjustable taxable income is $84,000 or below. The medical expenses tax offset is 20% of the amount by which the net medical expenses exceeds $2,120. The term 'medical expenses' is defined in paragraph 159P(4)(f) of the ITAA 1936 to include payments in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner. Taxation Ruling TR 93/34 describes a 'medical or surgical appliance' as being an instrument, apparatus or device which is manufactured, distributed or generally recognised as an aid to the function or capacity of a person with a disability or an illness. An appliance is an aid to function or capacity if it assists or improves a person's abilities in performing activities of daily living. Taxation Ruling TR 93/34 also provides that generally a household or commercial appliance is not a 'medical or surgical appliance' and that we need to look at the character of the appliance, not the purpose for which it is prescribed or used. In your case, although the bed was recommended by a doctor, it is not a 'medical or surgical appliance.' While we accept that the bed may assist your condition, it is a normal household appliance. The bed does not qualify as an eligible medical expense for the purpose of the medical expenses tax offset.