ATO Interpretative Decision
ATO ID 2001/36
Income Tax
Deductions and expenses: Travel Expenses in Relation to Medical TreatmentFOI status: may be released
This version is no longer current. Please follow this link to view the current version. |
-
This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Whether travel expenses incurred by a person with a disability in obtaining medical treatment is an allowable deduction under Income Tax Assessment Act 1997 section 8-1 against a disability pension income received.
Decision
The travel expenses are of a private nature and, as such, are not deductible under section 8-1 of the Income Tax Assessment Act 1997.
Facts
The taxpayer is in receipt of a disability pension and suffers from a medical condition. As a result of this condition, the taxpayer is severely restricted in the ability to move about freely in public places, especially without an escort or companion. The taxpayer has also developed other medical conditions which, are related to age. The taxpayer is required to make monthly visits to a general hospital and because of the condition the taxpayer finds it necessary to travel in the secure environment of a taxi to make these regular visits for medical treatment.
Reasons For Decision
The travel expenditure incurred by the taxpayer in travelling to and from the taxpayer's residence to the hospital for medical treatment is not relevant or incidental to the earning or receipt of the disability pension income, but rather these expenses are of a private nature.
The taxpayer contends that the cost of the travel by taxi is deductible under Income Tax Assessment Act 1997 section 8-1 against the pension income received.
To be deductible under the first limb of section 8-1 of the Act, the expenditure must be incurred in gaining or producing the assessable income, but expenditure which, is essentially of a private nature is not deductible.
It is a long standing principle that a taxpayer does not satisfy section 8-1 merely by demonstrating some causal connection between the expenditure and the derivation of income. What must be shown is a closer and more immediate connection. The expenditure must be incurred "in the course of" gaining or producing the assessable income. (Lunney v Commissioner of Taxation (1958) 100 CLR 478.) These principles have been affirmed by the High Court in Commissioner of Taxation v Payne [20001] HCA 3.
Therefore the taxpayer is not able to establish the requisite connection between travel to the hospital and receipt of the disability pension.
Date of decision: 19 August 1998
Legislative References:
Income Tax Assessment Act 1997
section 8-1
Case References:
Commissioner of Taxation v Payne
[2001] HCA 3.
(1958) 100 CLR 478.
Keywords
Domestic travel expenses
Medical expenses rebates
Travel expenses
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 19 August 1998 | Original statement |
| 8 November 2013 | Updated statement | |
| 13 May 2016 | Updated statement |