Private ruling: Medical expenses tax offset
Published: July 2011
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Question & answer | Are you entitled to claim the medical expenses offset for surgery | Yes.


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

Reasons for decision: Summary: A medical expense tax offset is available to a taxpayer under section 159P of the ITAA 1936, where the taxpayer incurs medical expenses for themselves or a dependant who is an Australian resident. The medical expense tax offset is only available if the amount of medical expenses (reduced by any entitlement to reimbursement from a health fund or government authority) exceeds $2000. The tax offset is 20% of the amount by which the net medical expenses exceeds $2000. Subsection 159P(4) defines 'medical expenses' to include payments to a legally qualified medical practitioner, or a public or private hospital, in respect of an illness or operation. Paragraph 159P(4) of the ITAA 1936 defines 'ineligible medical expenses' as payments to a legally qualified practitioner, nurse or chemist, or a public or private hospital, in respect of a cosmetic operation that is not a professional service for which a Medicare benefit is payable under Part II of the Health Insurance Act 1973 . Taxation Determination TD 94/5 states that where cosmetic surgery is performed by a legally qualified medical practitioner, it falls within the meaning of 'operation' for medical expense purposes. In your case, you have had the surgery performed by a legally qualified medical practitioner. As a Medicare benefit was payable in respect of the surgery, it is not an 'ineligible medical expense'. Therefore, as your net medical expenses exceeded $2000, you are entitled to a medical expense tax offset under section 159P of the ITAA 1936.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns. | Relevant facts: You are a resident of Australia for taxation purposes. | The surgeon was a legally qualified surgeon. | You were referred for this procedure. | You received a rebate from Medicare for part of the procedure.