Private ruling: medical expenses tax offset
Published: February 2012
Ruling period: Year ended 30 June 2008 | Year ended 30 June 2009 | Year ended 30 June 2010 | Year ended 30 June 2011
Date scheme commenced: 1 July 2007

Ruling: Q1: Is the cost of the therapeutic treatment you undertook an eligible expense for the purpose of the medical expenses tax offset? | A1: Yes.

Relevant facts and circumstances: You suffer from an illness. Your doctor recommended a particular therapeutic treatment run by a clinic. The therapeutic treatment was required by your doctor as part of a wider ongoing treatment for your medical benefit.

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 159P(3A) and | Income Tax Assessment Act 1936 subsection 159P(4).

Reasons for decision: Summary: Under subsection 159P(3A) of the Income Tax Assessment Act 1936 (ITAA 1936), a medical expenses tax offset is available to a resident taxpayer whose net medical expenses in the year of income exceeds the threshold amount. The amount of the tax offset is 20% of the expenses that exceed the threshold. In the 2002-03 to 2009-10 financial years the threshold was $1,500. In the 2010-11 financial year the threshold was $2,000. In order to qualify for the tax offset, the medical expenses must be paid by a resident taxpayer in respect of himself, or a resident dependant. The amount expended must be reduced by any amount paid/reimbursed, or eligible to be reimbursed, from a government or public authority or a society, association or fund (whether incorporated or not), regardless of who receives or is entitled to receive the reimbursement. Subsection 159P(4) of the ITAA 1936 defines medical expenses to include a payment for therapeutic treatment administered by direction of a legally qualified medical practitioner. 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. A therapeutic treatment involves the exercise of professional skill in the medical field in a way which normally involves the person administering the treatment using drugs or physical or mental processes of one kind or another for the purpose of curing or managing disease. Furthermore, therapeutic treatment as a concept is concerned with healing or curing, rather than preventing the need for therapy. Although the treatment must be administered by direction of a legally qualified medical practitioner, the treatment need not be administered by such a practitioner. In your case, you have incurred expenses to undergo therapeutic treatment which was required by your doctor as part of a wider ongoing treatment for your medical benefit. You were referred by your doctor to a particular clinic for a specific treatment. Although the treatment you received was not administered by a qualified medical practitioner you attended the sessions on the direction of a qualified medical practitioner. Accordingly, the costs incurred to undertake the therapeutic treatment are an eligible expense for the purpose of the medical expenses tax offset.

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