Private ruling: Medical Expenses Tax offset
Published: September 2011
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Can payments made for treatment in relation to your child's learning difficulty be included as a medical expense for the purpose of calculating a medical expenses tax offset? | A1: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1936 Section 159P. | Income Tax Assessment Act 1936 Subsection 159P(4).

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 a government or public authority or a society, association or fund. The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed $2,000 for the 2010-11 income year. Paragraph (d) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 includes payments made for therapeutic treatment administered by direction of a legally qualified medical practitioner. It was held in Case A53 69 ATC 313; 15 CTBR (NS) Case 30 that the mere suggestion or recommendation by a medical practitioner that the patient undergoes therapeutic treatment is not sufficient for the payment to qualify as medical expenses. The patient would have to be referred by a medical practitioner to a particular treatment provider for specific treatment. Although the treatment must be administered by direction of a legally qualified medical practitioner, the treatment need not be administered by such a practitioner. Your child's paediatrician referred your child to a specific institution for treatment and follows up this treatment through regular consultations. Your child's treatment sessions are being administered under the direction of a legally qualified medical practitioner. It is considered that it is therapeutic treatment because it is part of the medical practitioner's overall medical program for treating your child's learning disability, notwithstanding that the treatment may also have educational characteristics. Your payments to the institution for treatment of your child's learning disability therefore qualify as medical expenses and you are entitled to include the cost in your calculation of the 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. | Relevant facts: The arrangement that is the subject of the private ruling is described below. This description is based on the following documents. These documents form part of and are to be read with this description. The relevant documents are: | · the application for private ruling, | · copies of letters from your doctor, and | · a copy of a tax invoice | You and your child are Australian residents for income tax purposes. | Your child has been treated over recent years for early learning and significant language difficulties. | Your child has attended consultations with a paediatrician and following assessment was referred by the consulting paediatrician, to undertake treatment via regular weekly sessions at an institution that provides treatment for dyslexia and other specific learning difficulties. | Your child continues to have ongoing follow up assessments/consultations with the paediatrician. | You have incurred costs associated with this treatment. | There is no reimbursement for these expenses from either Medicare or your private health provider.