Private ruling: Medical expenses tax offset
Published: May 2012
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Does the therapeutic treatment you received qualify as medical expenses for the purposes of the medical expenses tax offset? | A1: Yes. | Q2: Does the expense for accommodation and meals associated with the therapeutic treatment qualify as medical expenses for the purposes of the medical expenses tax offset? | A2: No.

Relevant facts and circumstances: You are an Australian resident for income tax purposes. You underwent treatment for a medical condition. You were referred by you doctor for the treatments. You attended a residential rehabilitation program and incurred expenditure for an in house rehabilitation program which included accommodation and meals. You also attended treatment through the outpatient program at a Hospital. You incurred expenditure for the outpatient care. The therapeutic treatments were prescribed by your doctor. Both the in-house and outpatient services were monitored by your doctor. No reimbursement from Medicare or a private health fund was available for the expenses you incurred.


Reasons for decision: Summary: A medical expenses tax offset is available to a taxpayer under section 159P of the Income Tax Assessment Act 1936 , where the taxpayer pays medical expenses for themselves or a dependant who is an Australian Resident. The maximum tax offset is 20% of your net medical expense over $2,000. Net medical expenses are the medical expenses you have paid less any refund of these expenses which you or any other person has received, or are entitled to receive, from Medicare or a private health insurer. Medical expenses eligible for the tax offset include payments to doctors, nurses, chemists, dentists and also therapeutic treatment under the direction of a doctor. Expenses which do not qualify as medical expenses include payments made for food, travel or accommodation associated with the medical or therapeutic treatment. In your case, you have incurred expenditure for therapeutic treatment to treat your condition. These treatments were prescribed by your doctor, a legally qualified medical practitioner. Therefore, the expenses you incurred for therapeutic treatment are eligible for the medical expenses tax offset. However, the expenses incurred for food and accommodation associated with the therapeutic treatment are not eligible for the medical expenses tax offset. | Detailed Reasoning - Additional information: As part of the total fees paid relate to accommodation and meal expenses, you may need to apportion to determine the amount that is attributable to the therapeutic treatment sessions.

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