Private ruling: Medical aids
Date of advice: 17 January 2017
Published: June 2017
Ruling period: Year ended 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: A1: No.

Relevant facts and circumstances: You have a medical condition. Your work requires you to speak, present, listen and discuss in a big conference room or meeting room. You have purchased a pair of medical aids. Your employment requires you to: ● Do presentations for your department and team ● Meeting with a group of people at site, or in a big meeting room ● Attend a lot of meetings and tele-conferences. The job discussions mentioned above require you to have top range hearing in order to assist you at work. You have supplied copies of documents in support of you claim: ● A letter from your manager detailing your job description. ● A letter from a medical professional detailing your medical condition and consequent requirement for the special medical aids you have purchased. ● An invoice from the medical aid supplier describing the aids purchased and money paid for them.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income. Generally medical expenses have no direct connection to the gaining or producing of assessable income. The medical expense relates to a personal medical condition and is private in nature. Taxation Ruling IT 2217 addresses income tax deductions for medical appliances. It refers to the decision in Case Q17 83 ATC 62; Case 82 26 CTBR (NS) 556, where the taxpayer was a primary producer who had purchased a hearing aid so that his business associates could communicate with him in the day to day running of the business. The taxpayer argued that the hearing aid was an essential tool to enable him to carry on his business. The Board of Review disallowed the deduction. It was held that despite the connection between the outlay of the taxpayer and the taxpayer's income, the outlay was not necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income. The primary cause of the expenditure was for the correction of a disadvantage that was personal to the taxpayer. The expense was therefore of a private nature. Accordingly, claims for income tax deductions in respect of expenses incurred on medical appliances, for example, wheelchairs, hearing aids, spectacles, artificial limbs and similar appliances used by persons in carrying out their duties of an employment are not allowable. In your case, you needed to purchase medical aids to assist you in your job. In light of the principles outlined above, the costs of medical aids are private in nature. The expenses are not considered to be incurred in gaining your assessable income, but rather incurred in overcoming a medical condition. Therefore, you are not entitled to claim a deduction for this expenditure as it is private in nature.

Question and: Are you entitled to claim a deduction for the cost of medical aids?