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

Ruling: Q1: Does the cost of a medical report detailing your ongoing condition and treatment prepared by your legally qualified medical practitioner qualify as an eligible expense for the purposes of the medical expenses tax offset? | A1: Yes.

Relevant facts and circumstances: You are an Australian resident of taxation purposes. You have been diagnosed with a medical condition. You have paid your legally qualified medical practitioner to prepare a detailed medical report in regards to your ongoing condition and treatment. You did not receive a rebate from Medicare Australia or a private heath insurer.

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)

Reasons for decision: Summary: A medical expenses tax offset is available under subsection 159P(1) of the Income Tax Assessment Act 1936 (ITAA 1936) where the taxpayer pays eligible medical expenses in an income year for themselves or a dependant who is an Australian resident. The medical expenses tax offset is only available if the amount of medical expenses, after being reduced by any entitlement to reimbursement from a health fund or government authority such as Medicare, exceeds the threshold amount. The amount of net medical expenses tax offset you can claim will now depend on your level of income. You will be able to claim an offset of 10% of your net medical expenses over $5,000 if you have an adjusted taxable income (ATI) above: · $84,000 if you are single, or · $168,000 if you are a couple or family The family threshold will increase by $1,500 for each dependent child after the first. If your ATI is below these income thresholds, you are not affected by this change and can continue to claim an offset of 20% of your net medical expenses over the relevant threshold amount. For the 2012-13 financial year the threshold amount is $2,120. Please note that the threshold amount is subject to indexation and will change in future income years. The definition of the term medical expense includes payments made to a legally qualified medical practitioner. In your case, you were diagnosed with a medical condition. You have paid your legally qualified medical practitioner for a detailed report on your ongoing diagnosis and treatment. The cost for this report is considered an eligible medical expense and you are entitled to include the net cost in the calculation of the medical expense tax offset.