ATO Interpretative Decision
ATO ID 2001/156
Income Tax
Medical expenses rebateFOI status: may be released
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This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Can the taxpayer claim the medical expenses rebate for a mattress replacement system and recline lift chair under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), on the basis that the cost of purchasing these items is a payment 'for therapeutic treatment administered by direction of a legally qualified medical practitioner' within the meaning of paragraph 159P(4)(d) (ITAA 1936)?
Decision
No, the cost of acquiring the mattress replacement system and recline lift chair is not a payment 'for therapeutic treatment administered by direction of a legally qualified medical practitioner' within the meaning of paragraph 159P(4)(d) (ITAA 1936).
Facts
The taxpayer suffers from very poor circulation and limited movement, which are symptoms of a serious medical condition. The taxpayer is hospitalised as a result of complications associated with the medical condition, and during the period of hospitalisation, the taxpayer experiences severe bed sores.
As part of the healing process overseen by the medical practitioner responsible for the taxpayer's treatment, an air flotation mattress is installed in the hospital for the taxpayer's use. The air flotation mattress is designed to prevent bed sores by alleviating pressure and stimulating circulation.
Upon the taxpayer's release from hospital, the medical practitioner responsible for the taxpayer's treatment recommends that the taxpayer purchase an air flotation mattress in order to prevent the bed sores recurring.
The medical practitioner also recommends that the taxpayer obtain an electronic recline lift chair to enable the taxpayer to sit upright.
Reasons For Decision
Subsection 159P(1) (ITAA 1936) states, inter alia, that an amount paid by a taxpayer in the year of income as medical expenses less any amount paid to the taxpayer in respect of those medical expenses shall be treated as a rebatable amount in respect of that year of income. Paragraph 159P(4)(d) (ITAA 1936) defines medical expenses as payments made for therapeutic treatment administered by direction of legally qualified medical practitioner.
For the purposes of paragraph 159P(4)(d) (ITAA 1936), the term 'therapeutic treatment' contemplates that the treatment administered by the medical practitioner is directed toward the cure of the ill patient or management of the patient's illness.
In this case, the cost of acquiring the mattress and chair is not a payment for therapeutic treatment administered by direction of a legally qualified medical practitioner, as the purchase of these items is preliminary to the rendering of the therapy. Accordingly, the taxpayer may not claim the medical expenses rebate for a mattress replacement system and recline lift chair under section 159P (ITAA 1936), as the cost of purchasing these items is not a payment 'for therapeutic treatment administered by direction of a legally qualified medical practitioner' for the purposes of paragraph 159P(4)(d) (ITAA 1936).
Date of decision: 27 March 2001
Legislative References:
Income Tax Assessment Act 1936
section 159P
subsection 159P(1)
paragraph 159P(4)(f)
Case References:
Case R95
84 ATC 633
85 ATC 102 Case L62
79 ATC 490 Related ATO Interpretative Decisions
ATO ID 2001/154 ATO ID 2001/155
Keywords
Rebates
Deductions & expenses
Medical expenses
Medical expenses rebates
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 27 March 2001 | Original statement |
| 16 April 2010 | Archived |