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

Ruling: Q1: Are the costs associated with a health program eligible for the medical expenses offset? | A1: No.

Relevant facts and circumstances: You have a life threatening illness. You were referred to the health program by your doctor. The program is designed to assist long term hospital patients to reach a level of independence which would allow them to live safely in their home. Support workers assist patients in their home.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 159P.

Reasons for decision: Summary: Section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a tax offset is allowable to a taxpayer whose net medical expenses (that is, medical expenses less any amount paid or payable by Medicare or any other fund) in the year of income exceed a certain threshold. The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed $1,500 for the income year. The term medical expenses is defined in paragraph 159P(4) of the ITAA 1936. In your case, the most relevant parts of this definition are: · Paragraph 159P(4)(a) relating to payments made to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation, and · Paragraph 159(4)(h) relating to remuneration of a person for services rendered by him or her as an attendant of a person who is blind or permanently confined to a bed or an invalid chair. · Paragraph 159P(4)(d) relating to a payment for therapeutic treatment administered by direction of a legally qualified medical practitioner. It is insufficient that the treatment is simply recommended; rather it must be prescribed and managed by the legally qualified medical practitioner. In your case, you have undertaken a program with Queensland health to assist you return to independent living in your own home. Your doctor referred and recommended this program to you. You do not meet the requirements of the paragraphs identified above, as the assistance workers are not legally qualified nurses, you are neither blind nor permanently confined to a bed or invalid chair and the treatment has only been recommended by your doctor, rather than prescribed and managed. Therefore, the costs you have incurred in relation to the transition health program do not qualify as medical expenses.

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