Private ruling: Deductibility of a medical expense
Published: December 2011
Ruling period: Year ending 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for the cost of purchasing a health product? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1.

Reasons for decision: Summary: A deduction is not available for the expenditure incurred in purchasing the health product, as the expense is considered to be private in nature. | Detailed Reasoning - Detailed reasoning: Section 8-1 of the Income Taxation Assessment Act 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature. Generally medical expenses have no direct connection to the gaining or producing of assessable income as the purpose of the expense is to return you to health. The expenses relate to a personal medical condition and are private in nature. There is insufficient connection to the gaining or production of assessable income for a deduction to be allowed. Taxation Ruling IT 2217 addresses income tax deductions for medical appliances. It refers to the decisions in Case Q17 83 ATC 62; Case 82 26 CTBR (NS) 556 and Case P31 ; Gilbert v. Federal Commissioner of Taxation 82 ATC 141; Taxation Case 96 25 CTBR (NS) 715 where it was found that the sole purpose of a wheelchair or hearing aid was to aid the taxpayer in overcoming a personal disability in order to earn assessable income. Although the taxpayer might be unable to earn the assessable income without the aid of the relevant appliance, the outlay on the appliance was not incurred in gaining the assessable income but rather was incurred to help overcome an unfortunate disability suffered by the taxpayer. In your case, you have purchased a health product to assist you to complete your employment duties. These expenses are not incurred in gaining your assessable income, but rather incurred in overcoming a personal medical condition. This is considered private in nature and accordingly you are not entitled to a deduction for these expenses.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: Your job entails long hours with direct exposure to the sun and harsh humidity. | You sweat quite profusely and your medication can cause toxicity if you become greatly dehydrated. | Recently you suffered a medical condition at work and were admitted to hospital, requiring intravenous drips. | You consulted your GP about this problem and were advised to take a health product which is extremely expensive.