Private ruling: Medical expenses tax offset
Published: November 2013
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Is the cost of care in the Lodge considered to be a medical expense for the purpose of claiming a medical expenses tax offset? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 159P (4)

Reasons for decision: Summary: A medical expenses tax offset is available to a taxpayer under sub-section 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 term 'medical expenses' is defined in sub-section 159P(4) of the ITAA 1936. Paragraph (a) of the definition includes payments made to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation. Paragraph (h) includes remuneration of a person for services rendered by them as an attendant of a person who is blind or permanently confined to a bed or an invalid chair. The payment to the aged care facility must be in respect of an illness or operation. The payment will be accepted as being in respect of an illness if the taxpayer is an 'approved care recipient' under the ACA 1997. An 'approved care recipient' is a person who has been assessed as requiring care at levels 1 to 7 (Taxation Ruling TR 93/14). Medical expenses also include payments made to a public or private hospital in respect of an illness. An aged care facility that is an approved provider under the ACA 1997 is considered to be a hospital for the purposes of subsection 159P(4) of the ITAA 1936. In this case, you were an approved care recipient and required permanent residential care at a low level. However, the Lodge is not an approved provider under the ACA 1997. The payments you made to the Lodge are not considered to be made to a public or private hospital. Therefore, payments made to the Lodge do not qualify as medical expenses for the purposes of the medical expenses tax offset.

Relevant facts: You were a resident of the Lodge which is an aged care facility registered under the Supported Residential Service Act 2010 . | The Lodge provides for low level care only and is not registered under the Aged Care Act 1997 (ACA 1997).