Private ruling: Medical expenses tax offset
Published: October 2011
Ruling period: Year ending 30 June 2012 | Year ending 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015 | Year ending 30 June 2016
Date scheme commenced: 1 July 2011

Ruling: Q1: Can the costs of nappies and wipes be included as a medical expense in the calculation of a medical expenses tax offset? | A1: Yes

Relevant facts and circumstances: Your child is mentally disabled and is confined to a wheel chair. Your child is incontinent and must wear nappies. The nappies and wipes that are required for health and hygiene for your disabled child are prescribed by your doctor. You purchase the nappies and wipes from a chemist.

Relevant legislative provisions: 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 to a taxpayer under subsection 159P(1) of the Income Tax Assessment Act 1936 (ITAA 1936), where the taxpayer pays medical expenses in an income year for themselves or a dependant who is an Australian resident, to the extent that they are not reimbursed, or are eligible to be reimbursed, from a government or public authority or a society, association or fund. Medical expenses are defined in subsection 159P(4) of the ITAA 1936. Paragraph (a) of the definition of medical expenses includes payments made to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation. The meaning of the term 'illness' was discussed by Taxation Board of Review No. 3 in Case Q21 , 83 ATC 77; Case 85 26 CTBR (NS) 570. Dr Gerber (Member) stated that the term includes any condition marked by a pronounced deviation from the normal healthy state. Paragraph 6 of Taxation Ruling IT 2146 states that claims should be accepted where the taxpayer has provided evidence from a legally qualified medical practitioner that the expenditure is in respect of an illness and that the product was purchased from a chemist. In your case, your medical practitioner has prescribed nappies and wipes for your child due to a disability and they are being purchased from a chemist. Therefore, the expense you incur for nappies and wipes qualifies as an eligible medical expense, for the purposes of calculating your medical expenses tax offset.

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