Private ruling: Medical expenses tax offset
Published: January 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 01 July 2011

Ruling: Q1: Can the net medical expenses that you pay for medical treatment for your child be included when calculating your medical expenses tax offset? | A1: Yes.

Relevant facts and circumstances: You have a dependant child who is currently receiving orthodontic treatment. You are directly paying for the treatment that your child is receiving. You are a member of a health fund which is covering part of the treatment costs.

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 159P (1)

Reasons for decision: Summary: A rebate is available to a taxpayer whose net medical expenses in the year of income exceed the relevant threshold for that year. The rebate is 20 percent of the excess over the relevant threshold. Subsection 159P(1) of the Income Tax Assessment Act 1936 (ITAA 1936) requires that for an amount to qualify as a rebatable amount it must be a medical expense 'paid by the taxpayer' in respect of themselves or their dependants. In your case, you are paying for the cost of your child's orthodontic treatment. During the year, you anticipate that the net cost of the treatment will exceed the relevant threshold. You are entitled to include the net orthodontic expenses in your claim for a medical expenses tax offset.

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