Private ruling: Net Medical Expenses Tax Offset - attendant care
Date of advice: 31 July 2017
Published: November 2017
Ruling period: Year ended 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Are the expenses incurred for your child to attend Applied Behavioural Analysis therapy sessions to assist with their autism considered attendant care expenses for the purposes of the Net Medical Expense Tax Offset? | A1: No.

Relevant facts and circumstances: You are an Australian resident for tax purposes. You have a dependent child who has been diagnosed with moderate to severe Autism. Your child is not physically disabled however requires assistance to meet their personal care needs as they are non-verbal and not toilet trained. Your child’s mental health care team, comprising a legally qualified medical practitioner, paediatrician and psychologist have recommended your child receive applied behaviour analysis therapy. This therapy is provided by a registered ABA therapy providing centre. Whilst undertaking therapy at the centre, your child is provided with personal care when required. The fees charged to you by the centre are for attendance at the centre and are not itemised or apportioned. You have incurred out-of-pocket expenses for these therapy sessions.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 159P | Tax and Superannuation Laws Amendment (2014 Measures No.1) Act 2014

Reasons for decision: Summary: The net medical expenses tax offset is being phased out. Many items and services that may previously have been considered eligible medical expenses are no longer allowable. Tax and Superannuation Laws Amendment (2014 Measures No.1) Act 2014 amended section 159P of the Income Tax Assessment Act 1936 to phase out the 'Net Medical Expense Tax Offset’. Subsection 159P(1B) of the Income Tax Assessment Act 1936 was inserted as a result of the amendment. Subsection 159P(1B) states: For the 2013-14 to 2018-19 years of income, an amount that would otherwise be paid as medical expenses is treated as not being paid as medical expenses unless the payment: (a) relates to an aid for a person with a disability; or (b) relates to services rendered by a person as an attendant of a person with a disability; or (c) relates to care provided by an approved provider (within the meaning of the Aged Care Act 1997) of a person who: (i) is approved as a care recipient under that Act; or (ii) is a continuing care recipient within the meaning of that Act. Based on your circumstances paragraph 159P(1B)(b) of the ITAA 1936 would be the only provision where your expenses can be considered. Our consideration is outlined below. The Explanatory Memorandum to the amending legislation states: 3.25 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. Attendant care expenses relate to services and care provided to a person with certain disabilities to assist with everyday living, such as the provision of personal assistance, home nursing, home maintenance, and domestic services to a person who is blind or permanently confined to bed or a wheelchair. Eligible expenses include payments such as to a carer who looks after a person who is blind or permanently confined to a bed or wheelchair or payment to a company for the provision of a carer for a disabled person, to the extent the payments represent remuneration of a person providing services as an attendant or carer. Your child receives applied behaviour analysis therapy (ABA) therapy through the ABA program at the Centre. Even though your child is provided with personal care whilst in the care of the centre’s staff, the personal care is considered to be incidental to the therapy that they receive through the program. It is considered that the payments you make to the Centre are primarily for therapeutic treatment as opposed to attendant care. As such the fees paid to the Centre are not considered payments that relate to services rendered by a person as an attendant of a person with a disability and are not an eligible medical expense. Therefore, you are not entitled to include your out-of-pocket expenses in relation to ABA therapy in the calculation of the NMETO.