Private ruling: Medical expenses
Date of advice: 7 September 2015
Published: September 2015
Ruling period: Year ended 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Can you include the payments relating to your disability aid in your medical expenses tax offset calculation? | A1: Yes.


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

Reasons for decision: Summary: A medical expenses tax offset is available under subsection 159P(1) of the Income Tax Assessment Act 1936 (ITAA 1936) where you pay certain medical expenses in an income year for yourself or a dependant who is an Australian resident, to the extent that you are not reimbursed, or are eligible to be reimbursed, from a government or public authority or a society, association or fund. Under changes to the legislation, the medical expenses tax offset is being phased out. Subsection 159P(1B) of the ITAA 1936 states that: For the 2013-14 to 2018-19 years of income, an amount that would otherwise be paid as medical expenses is treated as not being paid as medical expenses unless the payment: (a) relates to an aid for a person with a disability; or (b) relates to services rendered by a person as an attendant of a person with a disability; or (c) relates to care provided by an approved provider (within the meaning of the Aged Care Act 1997 ) of a person who: (i) is approved as a care recipient under that Act; or (ii) is a continuing care recipient within the meaning of that Act. In your case you suffer from a disability and will incur costs in relation to a disability aid. Your out-of-pocket costs for your disability aid are included in the calculation of the medical expenses tax offset. Please note that this tax offset is income tested. The percentage of net medical expenses you can claim and the threshold amount is determined by your adjusted taxable income (ATI) and family status.

You will incur costs in relation to a disability aid.