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

Ruling: Q1: Do the expenses you incurred to attend an overseas treatment centre qualify as therapeutic treatment administered by direction of a legally qualified medical practitioner for the purposes of the medical expenses tax offset? | A1: No.

Relevant facts and circumstances: You had an injury. You attended an overseas treatment centre to receive treatment. You did not receive a referral.

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 ($2,060 for 2011-2012). 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. However, it is not necessary that the payments be made to a resident of Australia or that they are paid in Australia. Therefore, medical expenses paid during an overseas trip may qualify for the tax offset. 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: For whaThe 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. 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 attended an overseas treatment centre. However, you did not receive a referral from a legally qualified medical practitioner to attend the centre. As the treatment you received was not administered by direction of a legally qualified medical practitioner the costs are not considered to be medical expenses for therapeutic treatment administered by direction of a legally qualified medical practitioner as defined under section 159P of the ITAA 1936.