Income tax: medical expense rebate - meaning of medical or surgical appliance
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FOI status:may be releasedFOI number: I 1013981
|What this Ruling is about|
|Date of effect|
|This Ruling, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953, is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Ruling is a public ruling and how it is binding on the Commissioner.|
What this Ruling is about
2. Section 159P allows a rebate for net medical expenses exceeding $1,000. Net medical expenses includes payments for a 'medical or surgical appliance' prescribed by a legally qualified medical practitioner.
- manufactured as; or
- distributed as; or
- generally recognised to be
- Adhesive plaster and strapping
- Auditory Trainers (very powerful hearing aids)
- Bath seats of the kind used by invalids or aged persons
- Car controls for the disabled
- Colostomy appliances
- Hearing aids
- Invalid carrying chairs
- Invalid chairs
- Invalid tricycles including motor propelled
- Kidney dialysis machines and associated plumbing installation cost
- Maximyst machines (a pump which produces a fine spray of bronchodilator, antibiotic, or mucus thinner far up the airways)
- Medical or surgical wigs for use by a person which is necessitated by loss of hair through sickness or disease (other than naturally occurring baldness) or the effects of the treatment of sickness or disease
- Neoprene bandages/wraps to provide support
- Oxygen equipment
- Spinal and surgical braces
- Surgical shoes and boots, braces and irons
- Wheel chairs
- Breathing monitors
- Camouflage make up systems specially formulated for people who have a disfigurement to the face or body
- Commercial or household air conditioners
- Cosmetic wigs
- Heavy underclothing for people suffering poor circulation
- Squash balls prescribed to exercise a person's hand
- Musical keyboards to encourage children to raise and extend each finger independently
- Language Masters
- Lifts for conventional commercial or household use
- Language Programmes and kits
- Hydrotherapy pools
- Spa pools
- Swimming pools
- Wheelchair ramps
Date of effect
10. This Ruling applies to years of income commencing both before and after the date on which it is issued. However, in any case where this Ruling is less favourable to a taxpayer than the Commissioner's previous practice, it only applies to medical expenses paid after the date of this Ruling. Before the Federal Court decision in FC of T v. Ildes 88 ATC 4214; (1988) 19 ATR 952 we considered that an appliance was a medical appliance if it was prescribed by a legally qualified medical practitioner to cure or alleviate a disability or illness.
11. Furthermore, this Ruling does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Ruling (see paragraphs 21 and 22 of Taxation Ruling TR 92/20).
13. Whether an item is a fixture is irrelevant in determining whether that item is a medical or surgical appliance (Ildes ATC at 4216; ATR at 954). Thus, some fixtures may be medical or surgical appliances e.g., a chairlift installed in a home and electrically operated (Case D37 72 ATC 210, 18 CTBR (NS) Case 7 ).
Medical or Surgical
15. For an item to be a medical or surgical appliance, it must be an aid to function or capacity (Ildes ATC at 4216; ATR at 954). This test looks to the character of the appliance, not the purpose for which it is prescribed or used. It is not sufficient that a medical practitioner prescribes an appliance for medical or surgical ends.
16. It follows that an item is a medical or surgical appliance if it is manufactured as, distributed as, or generally recognised to be an aid to a person's function or capacity (Ildes ATC at 4216; ATR at 954, and (1963) 14 TBRD Case P29 ; 11 CTBR (NS) Case 63 ).
17. Function or capacity is not limited to a person's physical and mental capabilities. For example, Taxation Boards of Review have held surgical wigs (e.g., Case F24 72 ATC 125; (1974) 19 CTBR (NS) Case 42 ) and an electrically operated chairlift installed in a home to be a medical or surgical appliances. We consider that function or capacity includes the ability to perform activities of daily living (Case P40 82 ATC 184 at 191; 25 CTBR (NS) Case 104 at 763, approved in Ildes ATC at 4216; ATR at 954).
19. A man suffers from coelic disease (a disease affecting the internal lining of the small bowel). A doctor prescribes the use of gluten-free foods to assist him in the performance of daily living activities.
20. The gluten-free food is not a 'medical or surgical appliance'. Food is not an appliance for the purposes of this definition because it is not an instrument, apparatus or device. However the purchase of this food may qualify as a 'medical expense' under paragraph (a) of the definition of 'medical expenses' in subsection 159P(4).
22. The additional items of clothing are not 'medical or surgical appliances'. The items are normal articles of clothing and therefore not appliances manufactured as, distributed as or recognised to be aids to function or capacity.
23. A women suffers from a disease that causes baldness. She suffers extreme embarrassment and psychological stress associated with this baldness. The woman's doctor advises her that she should wear a wig.
24. If the wig is a medical or surgical wig and relieves potential incapacity it is a 'medical or surgical appliance'. A medical or surgical wig is made to measure and has a special type of construction.
26. The spa is not a 'medical or surgical appliance'. It is not an aid to function or capacity. The fact that an article has a therapeutic purpose does not mean that the article is a 'medical or surgical appliance'.
Commissioner of Taxation
21 October 1993
BO ALB ADVN 899001
- artificial aids
- medical appliances
- medical expenses
- surgical appliances
- therapeutic treatment
- ITAA 159P(4)
FC of T v. Ildes
88 ATC 4214
(1988) 19 ATR 952
Case P29 / Case 63
(1963) 14 TBRD 143
11 CTBR (NS) 390
Case D37 / Case 7
72 ATC 210
(1972) 18 CTBR (NS) 33
Case F24 / Case 42
74 ATC 125
(1974) 19 CTBR (NS) 282
Case P40 / Case 104
82 ATC 184
(1982) 25 CTBR (NS) 755