Private ruling: medical expenses tax offset
Published: November 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Do your payments for personal care services qualify as medical expenses for the purpose of claiming the medical expenses tax offset? | A1: No.

Relevant facts and circumstances: You are unwell and have been assessed as requiring a high level of care. You are not blind or wheelchair bound. You receive continual home care from an accredited health care service provider organisation. Your carers are either personal care assistants, or assistants in nursing. A registered nurse calls in periodically to check on procedures.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 159P | Income Tax Assessment Act 1936 Subsection 159P(4)

Reasons for decision: Summary: Medical expenses tax offset Pursuant to section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) a tax offset is available to a taxpayer whose net medical expenses in the 2012 year of income exceed $2,060. The amount of the offset is 20% of the excess over the threshold amount. To qualify for the tax offset, the medical expenses must be paid by a resident taxpayer in respect of themselves or a resident dependant. For the payments to qualify as medical expenses for the purposes of the medical expenses tax offset, the expense must fall within the definition of 'medical expenses' as contained in subsection 159P(4) of the ITAA 1936. Paragraph 159P(4)(a) of the ITAA 1936 includes as a medical expense, payments to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation. As your care is not undertaken by a legally qualified medical practitioner, nurse or chemist, and as you are not a resident of a hospital or aged care facility, this does not apply to your case. The term 'medical expenses' is defined in paragraph 159P(4)(h) of the ITAA 1936, for the purposes of the medical expenses tax offset, to include payments as remuneration of a person for services rendered by them as an attendant of a person who is blind or permanently confined to a bed or an invalid chair. The need to employ a person to provide assistance to enable you to live at home is necessitated by your illness and aged care needs. However, payments for carer services in your case, since you are neither blind or permanently confined to a bed or an invalid chair would fall outside the scope of paragraph 159P(4)(h) of the ITAA 1936. Therefore, your payments do not qualify as medical expenses for the purposes of the medical expenses tax offset.

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