Private ruling: Medical expenses tax offset
Published: January 2012
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to include the costs incurred in administering the Early Start Denver Model intervention programme in your calculation of the medical expenses tax offset? | A2: 

Relevant facts and circumstances: In the 2009-10 financial year your child was diagnosed with autism. He was assessed by two separate agencies. Both assessment teams strongly recommended he attend an early intervention programme. You son received a place in an autistic centre. The centre provides treatment for autism. The treatment was recommended by a legally qualified medical practitioner who monitors their progress. You incur expenses in relation to centre fees and travel expenses in relation to the treatment.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 159P | Income Tax Assessment Act 1936 Section 159P(1) | Income Tax Assessment Act 1936 Section 159P(3A) | Income Tax Assessment Act 1936 Section 159P(4)

Reasons for decision: Summary: Subsection 159P(3A) of the Income Tax Assessment Act 1936 (TAA 1936) provides that a rebate is allowable to a taxpayer whose net medical expenses in the year of income exceed the relevant threshold. The expenses must be paid by a resident taxpayer in respect of themselves or their resident dependant. The taxpayer's child is a resident dependant in accordance with subsection 159P(4) of the ITAA 1936. Medical expenses are defined in subsection 159P(4) of the ITAA 1936. Paragraph (d) of the definition includes payments 'for therapeutic treatment administered by direction of a legally qualified medical practitioner'. In order to qualify for the rebate such payments must meet the following conditions; they are for therapeutic treatment the therapeutic treatment is administered by the direction of a legally qualified medical practitioner. The general concept of therapeutic treatment is healing or curing rather than preventing the need for therapy ( Case S2 , 85 ATC 102; 17 TBRD Case S8 ). In Case R95 84 ATC 633; Case 148 27 CTBR (NS) 1154, the Administrative Appeals Tribunal found that 'therapeutic treatment' necessitated the exercise of professional skill in the medical field. This would normally involve the person administering the treatment using chemical agents or drugs or some physical and mental processes which are directed towards the cure or management of a disease or ailment. The Commissioner accepts that the ABA therapy is therapeutic treatment for the purposes of subsection 159P(4) of the ITAA 1936. The therapeutic treatment must be administered by direction of a legally qualified medical practitioner. 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 ( Case A53 69 ATC 313). Your child was referred to treatment programme by a legally qualified medical practitioner. Accordingly, the expenses you incurred which relate directly to the administering of this program are eligible medical expenses under section 159P of the ITAA 1936. Such allowable expenses would be those for program supervision, administration and therapy fees. | Detailed Reasoning - Travel expenses: Subsection 159P(4) of the ITAA 1936 specifically defines medical expenses which are eligible for the medical expenses rebate. The definition does not include the costs of travel to obtain medical treatment. This was confirmed by the decision of the Administrative Appeals Tribunal in Case R12 84 ATC 165; 27 CTBR (NS) Case 63 . In that case, travelling expenses whilst necessary in order to receive medical treatment were held not to be a payment for the medical treatment. Accordingly, travel expenses incurred for James to attend the autistic centre are not medical expenses as defined in subsection 159P(4) of the ITAA 1936 and you will not be entitled to a medical expenses tax offset.

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. | Are you entitled to include travel expenses to attend treatment in your calculation of the medical expenses tax offset?