Private ruling: Medical expenses tax offset
Published: December 2013
Ruling period: Year ended 30 June 2013 | Year ended 30 June 2014
Date scheme commenced: 1 July 2012

Ruling: Q1: Can the costs you paid for the purchase of products directly from a naturopath or retail outlet for the treatment of a chronic illness be included when calculating the medical expenses tax offset? | A1: No. | Q2: Can the costs you paid for services provided by naturopaths, remedial massage therapists and acupuncturists for the treatment of a chronic illness be included when calculating the medical expenses tax offset? | A2: No.

Relevant facts and circumstances: You are an Australian resident for taxation purposes. You suffer from a medical condition and as conventional medicine was not alleviating your condition, you have sought alternative treatment. This includes treatment from naturopaths, therapeutic massage, acupuncture, reflexology, vitamins and homeopathic medicines. You continue to have time off work due to your condition. Your doctor is aware that you have sought alternative treatment to improve your health, but you have not been referred by a legally qualified medical practitioner to a specific practitioner of any of the alternative treatments you have undertaken. You have purchased non-prescribed alternative medicines, vitamins, supplements, tonics from retail outlets and health food stores, and these have not been specifically prescribed or monitored by a legally qualified health practitioner.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 159P | Income Tax Assessment Act 1936 Subsection 159P(1) | Income Tax Assessment Act 1936 Subsection 159P(4)

Reasons for decision: Summary: A medical expenses tax offset is available under subsection 159P(1) of the Income Tax Assessment Act 1936 (ITAA 1936) where the taxpayer pays eligible medical expenses in an income year for themselves or a dependant who is an Australian resident. The medical expenses tax offset is only available if the amount of medical expenses, after being reduced by any entitlement to reimbursement from a health fund or government authority such as Medicare, exceeds the threshold amount. Medical expenses are defined in subsection 159P(4) of the ITAA 1936 to include: · payments to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation and also; · payments for therapeutic treatments administered by direction of a legally qualified medical practitioner. However, medication purchased from other outlets (for example, a health food store, supermarket or other general outlet), will only qualify as a medical expense if the treatment is therapeutic and administered by direction of a legally qualified medical practitioner. Therapeutic treatment as a concept is concerned with healing or curing, rather than preventing the need for therapy. Therapeutic treatment involves the exercise of professional skill in the medical field in a way which normally involves the person administering the treatment using drugs or physical or mental processes of one kind or another for the purpose of curing or managing the disease. The therapeutic treatment must be administered by direction of a legally qualified medical practitioner. For treatment to be regarded as being administered by direction of a legally qualified medical practitioner, the treatment needs to be advised, prescribed or ordered by a legally qualified medical practitioner. It also requires monitoring to some extent by the medical practitioner, or in some cases, self-monitoring. A mere suggestion or recommendation by a doctor to a patient that the patient undergo therapeutic treatment is not enough for the associated expenses to qualify as medical expenses. The patient must be referred to a particular person for the therapeutic treatment. Although the treatment must be administered by direction of a legally qualified medical practitioner, the treatment need not be administered by such a practitioner. In your case, you sought treatment from naturopaths, therapeutic masseurs and acupuncturists. These practitioners do not meet the definition of a legally qualified medical practitioner for the purposes of section 159P of the ITAA 1936. Some alternative medication was purchased from a naturopath who is also not considered to be a legally qualified medical practitioner. Some medication was also brought from retail outlets. Therefore, these costs are not medical expenses for the purposes of the medical expenses tax offset. Similarly, the cost of therapeutic treatments provided by a naturopath, massage therapists, acupuncturists and reflexologists do not qualify as medical expenses for the purposes of the medical expenses tax offset as they were not considered to be administered by direction of a legally qualified medical practitioner.