Net medical expenses tax offset income test

On 8 May 2012, the government announced in the 2012-13 Budget that it will income test the net medical expenses tax offset from 1 July 2012.

Taxpayers with an adjusted taxable income above $84,000 for singles or $168,000 for a couple or family in 2012-13 will be affected. The family threshold will increase by $1,500 for each dependent child after the first. These taxpayers will only be able to claim a reimbursement of 10% for eligible out of pocket expenses incurred in excess of $5,000 (indexed annually).

Taxpayers with an adjusted taxable income below these thresholds will be unaffected. These taxpayers will continue to be able to claim a reimbursement of 20% for net medical expenses over $2,120 (CPI indexed for 2012-13) when they lodge their tax return.

More information For more information, refer to 2012-13 Budget Paper No 2 - Revenue Measures (PDF 1.4mb) page 34.