Private ruling: Medical expenses tax offset
Published: August 2013
Ruling period: Year ended 30 June 2012 | Year ended 30 June 2013 | The scheme commenced on | 1 July 2011

Ruling: Q1: Can you claim the medical expense tax offset for payments made to a naturopath? Answer No.

Relevant facts and circumstances: Your partner became ill following a medical procedure and consulted a naturopath for treatment to regain health. Your partner chose a naturopath when looking for treatment for illness. Your partner was treated by a naturopathic doctor and the treatment included the supply of naturopathic products including various foods, personal care items, vitamins and minerals. These items were supplied through the naturopath's business. The treating general practitioner did not refer your partner to the naturopath for treatment but is aware of the treatment by the naturopath and that the treatment had been beneficial.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 159P & subsection 159P(4).

Reasons for decision: Summary: For the purposes of the medical expenses tax offset, the term 'medical expenses' is defined in subsection 159P(4) of the Income Tax Assessment Act 1936 (ITAA 1936). In paragraph (a) of the definition medical expenses are defined as payments 'to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation' Also, in paragraph (d) of the definition the definition medical expenses include payments 'for therapeutic treatment administered by direction of a legally qualified medical practitioner'. The first issue to be considered is whether a naturopath is a legally qualified medical practitioner. In Case U20 20 ATC 183, the Administrative Appeals Tribunal held that a chiropractor and naturopath were not legally qualified medical practitioners as they were not qualified in terms of the requirements of the Medical Act in the relevant State. Therefore, the payments to your naturopath are not payments 'to a legally qualified medical practitioner' as required by paragraph (a) of the definition of 'medical expenses'. Additionally, the products that were purchased were not purchased from a chemist or hospital as set out in paragraph (a) of the definition. The second issue is to consider if your partner's naturopathic treatment was by direction of a medical practitioner. To qualify, the payments to the naturopath for treatment and medicines must be 'for therapeutic treatment administered by direction of a legally qualified medical practitioner'. In Case A53 69 ATC 313, the Board of Review held that a doctor's advice or encouragement to a patient to seek therapeutic treatment does not render the treatment received 'treatment administered by direction of a legally qualified medical practitioner'. The Board of Review stated that the phrase refers to treatment for which the doctor retains medical responsibility. That is, the treatment is undergone as part of that physician's care of the patient. In your case, your partner sort the services of a naturopath after other treatments were unsuccessful. That the doctor is aware that you have been helped by a naturopath is not sufficient for the treatment provided by the naturopath to be considered to have been administered by the direction of your doctor. For the payments to qualify for the medical expenses tax offset, they must fall within the definition of 'medical expenses' provided by subsection 159P(4) of the ITAA 1936. As your payments are not to a legally qualified medical practitioner, chemist or hospital or for therapeutic treatment administered by the direction of a legally qualified medical practitioner, they do not fall within this subsection and therefore do not qualify for the medical expenses tax offset.