Private ruling: Medical expenses tax offset
Published: April 2013
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Does the treatment you received qualify as a medical expense for the purposes of calculating a medical expenses tax offset? | A1: Yes.

Relevant facts and circumstances: You suffered from a condition. A doctor referred you a fulltime inpatient clinic for treatment. Treatment at the clinic is performed by qualified medical practitioners. You incurred expenses that exceeded the threshold amount to attend the clinic.

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

Reasons for decision: Summary: A medical expenses tax offset is available to a taxpayer under section 159P 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 or a private health fund. The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed the threshold amount. The term medical expenses is defined in subsection 159P(4) of the ITAA 1936 to include payments for therapeutic treatment administered by the direction of a legally qualified medical practitioner. Therapeutic treatment as a concept is concerned with healing or curing, rather than preventing the need for therapy (Case T67 (1967) 18 TBRD 36; (1967) 14 CTBR (NS) Case 31 ). Therapeutic treatment involves the exercise of professional skill in the medical field. This would normally involve the person administering the treatment using drugs or physical or mental processes of one kind or another for the purpose of curing or managing the disease ( Case R95 84 ATC 633; 27 CTBR (NS) Case 48 ). The therapeutic treatment must be administered by direction of a legally qualified medical practitioner. In Case A53 69 ATC 313, it was held: The phrase 'therapeutic treatment administered by direction of a legally qualified medical practitioner' does not refer to treatment undergone by direction of a physician but to treatment administered by his direction. However 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. In your case, you were referred a clinic for treatment for a condition. As you were referred to the clinic by a qualified medical practitioner it is accepted that the treatment you received is a therapeutic treatment for the purposes of subsection 159P(4) of the ITAA 1936. Therefore, the expenses you incurred in attending the clinic are an eligible medical expense for the purpose of calculating the medical expenses tax offset.