Private ruling: Medical expenses
Ruling period: Year ending 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Can the cost of your scar correction procedure be included as a medical expense for the purpose of calculating a medical expenses tax offset? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 159P(1) | 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 $2000 for the 2010-11 income year. Subsection 159P(4) of the ITAA 1936 was amended to define 'ineligible medical expenses' to include payments to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of a cosmetic operation that is not a professional service for which a Medicare benefit is payable under Part II of the Health Insurance Act 1973 . The amendments were made to the legislation for the 2005-06 and later income years. In your case, you underwent a cosmetic operation for which a Medicare benefit was not payable. Therefore, for the purposes of the medical expenses tax offset, your scar correction operation is an ineligible medical expense and consequently the cost can not be included in medical expenses tax offset calculations.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns. | Relevant facts: You had initially undertaken a procedure several years ago. | You claimed a medical expense for this in your tax return for the applicable year. | After this surgery you were left with a rather large scar which was quite noticeable and over the years this has affected your self esteem. | You decided to have your condition repaired and opted for further surgery to correct your condition. | You incurred expenses relating to this procedure. | You did not receive a Medicare benefit for this procedure.