Private ruling: Medical expenses tax offset
Published: March 2015
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you eligible to claim the medical expenses tax offset in the 2013-14 financial year? | A1: No.

Relevant facts and circumstances: You underwent a medical procedure. You incurred medical expenses in the 2013-14 financial year. You were not eligible to claim the medical expenses tax offset in the 2012-13 financial year.

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

Reasons for decision: Summary: A medical expenses tax offset is available under subsection 159P(1) of the Income Tax Assessment Act 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. The net medical expenses tax offset (NMETO) is being phased out between the 2013-14 and 2018-19 financial years and eligibility for this offset has changed. Transitional arrangements will allow taxpayers to claim the offset from the 2013-14 income year until the end of the 2018-19 income year, but only for those medical expenses relating to disability aids, attendant care or aged care. In addition, for the 2013-14 and 2014-15 income years, taxpayers will be eligible to claim the full range of medical expenses (as defined currently) but only if they have received an amount of the net medical expenses tax offset in the previous income year (or in both 2012-13 and 2013-14 in respect to claims in the 2014-15 income year). In your case you have not received an amount of the NMETO in your 2012-13 income tax assessment so you are limited to claims relating to disability aids, attendant care or aged care only. The concept of a disability aid is intended to mean an instrument, apparatus, assistance device or any other item of property that is manufactured as, distributed as, or generally recognised to be, an aid to the function or capacity of a person with a disability. The concept of attendant care is explained in the amendments as services rendered by a person as an attendant of a person with a disability. The concept includes services and care provided to a person with a disability who needs personal assistance to complete activities of daily living, who is able to manage living in the community and who lives in their own home or in their own leased accommodation. The concept of aged care relates to services and accommodation provided by an approved aged care provider to a person who is a care recipient or continuing care recipient. In your case, you have incurred expenses for a medical procedure. These expenses are not considered to be for disability aids, attendant care or aged care for the purposes of the medical expenses tax offset. Accordingly, you are not entitled to include your expenses for the medical treatment in your calculation of a medical expenses tax offset. Although we acknowledge your medical condition and the hardships you have subsequently endured, the legislation is very specific as to the circumstances under which a taxpayer is entitled to a medical expenses tax offset in the 2013-14 financial year due to the legislative changes in relation to the phase out of the offset as mentioned above. The Commissioner does not have the discretion to allow you to claim the full range of medical expenses when you have not received an amount of the medical expenses tax offset in your 2012-13 income tax assessment.