ATO Interpretative Decision
ATO ID 2001/621 (Withdrawn)
Income Tax
Medical expenses tax offset - respite care in an aged care facilityFOI status: may be released
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This ATO ID is withdrawn as it is no longer current due to changes in the Aged Care Act 1997.This document incorporates revisions made since original publication.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Is the taxpayer entitled to a medical expenses tax offset under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) for the cost of fees charged for respite care in an aged care facility?
Decision
Yes. The taxpayer is entitled to a medical expenses tax offset under section 159P of the ITAA 1936 for the cost of fees charged for respite care in an aged care facility.
Facts
The taxpayer's spouse entered an aged care facility for respite care after 1 October 1997.
The aged care facility is an approved aged care provider under the Aged Care Act 1997.
The taxpayer's spouse requires respite care at level 6.
Fees paid to the aged care facility exceed $1250.
Reasons for Decision
Subsection 159P(3A) of the ITAA 1936 provides that a tax offset is allowable to a taxpayer whose net medical expenses in the year of income exceed $1250.
The expenses must be paid by a resident taxpayer in respect of themselves or their resident dependant. A dependant includes the spouse of a taxpayer pursuant to subsection 159P(4) of the ITAA 1936.
Paragraph (a) of the definition of medical expenses under subsection 159P(4) of the ITAA 1936 includes payments made to a public or private hospital in respect of an illness or operation.
An aged care facility or nursing home will be regarded as a hospital for the purposes of subsection 159P(4) of the ITAA 1936 if it is approved under the Aged Care Act (Taxation Ruling IT 261).
The payment to the hospital must be in respect of an illness or operation. The payment, if made on or after 1 October 1997, will be accepted as being in respect of an illness if the taxpayer is an 'approved care recipient' under the Aged Care Act. An 'approved care recipient' is a person who has been assessed as requiring care at levels 1 to 7 (Taxation Ruling TR 93/14). Respite care, which is in the nature of occasional rather than full time care, qualifies as approved care for these purposes.
The taxpayer made payments after 1 October 1997 to an aged care facility for respite care of their spouse. The aged care facility is an approved aged care provider under the Aged Care Act. The taxpayer's spouse is an 'approved care recipient' as they require care at level 6. The payments therefore qualify as medical expenses for the purposes of calculating the medical expense tax offset under section 159P of the ITAA 1936.
Date of decision: 9 October 2001
Legislative References:
Income Tax Assessment Act 1936
subsection 159P(4)
subsection 159P(3A)
The Act
Related Public Rulings (including Determinations)
IT 261
TR 93/14
Keywords
Aged care expenses
Medical expenses
Medical expenses rebates
ISSN: 1445-2782
| Date: | Version: | |
| 9 October 2001 | Original statement | |
| You are here | 16 April 2010 | Archived |