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

Ruling: Q1: Do the costs associated with purchasing an iPad and touch screen computer qualify as eligible medical expenses for the purposes of the medical expense tax offset? | A1: No.

Relevant facts and circumstances: Your child was diagnosed with an illness. You child uses an iPad and touch screen computer to access speech pathology programs and modified educational programs. The equipment was recommended by your child's occupational and speech therapists. The equipment is used for speech specific programs and general learning.

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) | Income Tax Assessment Act 1936 Paragraph 159P(4)(f)

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 Medicare and private health insurers. For the 2011-12 financial year the medical expenses tax offset is 20% of the amount by which the net medical expenses exceed the threshold of $2060. Please note that the threshold amount is subject to indexation and from the 2012-13 financial year the rebate is also subject to income testing and this will change the threshold and percentage of the offset in future years. Subsection 159P(4) of the ITAA 1936 defines medical expenses which are eligible for the medical expenses tax offset. The Commissioner does not have the discretion to allow the medical expenses tax offset for any other costs. Paragraph (f) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 includes payments made in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner. Taxation Ruling TR 93/34 explains the meaning of a 'medical or surgical appliance' as an instrument, apparatus or device which is manufactured as, or distributed as, or generally recognised to be an aid to the function or capacity of a person with a disability or illness. TR 93/34 also provides that generally, a household or commercial appliance is not a 'medical or surgical appliance' and that we need to look at the character of the appliance, not the purpose for which it is prescribed or used. The mere fact that an item gives therapeutic treatment, in that it relieves, heals or prevents a medical condition, does not make it a 'medical or surgical appliance'. The iPad and touch screen computer consists of everyday items, although the items may be used in conjunction with your child's treatment and education, they are not manufactured as disability aids. Therefore, these items are not considered to be medical or surgical appliances and do not qualify as eligible medical expenses for the purpose of the medical expenses tax offset.