ATO Interpretative Decision

ATO ID 2001/243 (Withdrawn)

Income Tax

Medical expenses tax offset - therapeutic treatment
FOI status: may be released
  • This ATO ID is withdrawn because it contains a view in respect of a provision of the Income Tax Assessment Act 1936 that does not apply after the 2014-15 year of income. Despite its withdrawal, this ATO ID continues to be a precedential ATO view in respect of decisions for years of income up to, and including, the 2014-15 year of income.
    This document has changed over time. View its history.

Status of this decision: Decision Withdrawn 27 October 2016.
CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Does therapeutic treatment need to be at the direction of a legally qualified medical practitioner in order to be considered a medical expense as defined in subsection 159P(4) of the Income Tax Assessment Act 1936 (ITAA 1936)?

Decision

Yes, therapeutic treatment must be at the direction of a legally qualified medical practitioner in order to be considered a medical expense as defined in subsection 159P(4) of the ITAA 1936.

Reasons for Decision

Section 159P of the ITAA 1936 provides for a rebate (medical expenses tax offset) to a taxpayer whose net medical expenses in the year of income exceed the threshold dollar amount specified in the section. The amount of the tax offset is equal to 20% of the expenditure that exceeds the threshold amount.

Paragraph (d) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 provides that medical expenses include payments 'for therapeutic treatment administered by direction of a legally qualified medical practitioner ' (emphasis added).

It was held in Case A53 69 ATC 313; (1969) 15 CTBR (NS) Case 30 that the mere suggestion or recommendation by a medical practitioner that the patient undergoes therapeutic treatment is not sufficient for the payment to qualify as medical expenses. The patient would have to be referred by a medical practitioner to a particular person for specific treatment.

In the context of subsection 159P(4) of the ITAA 1936, therapeutic treatment involves the exercise of professional skill in the medical field in a way which normally involves the person administering the treatment using drugs or physical or mental processes of one kind or another for the purpose of curing or managing disease (Case R95 84 ATC 633; (1984) 27 CTBR (NS) Case 148).

Furthermore, therapeutic treatment as a concept is concerned with healing or curing, rather than preventing the need for therapy (Case T67 (1967) 18 TBRD 346; (1967) 14 CTBR (NS) Case 31). Although the treatment must be administered by direction of a legally qualified medical practitioner, the treatment need not be administered by such a practitioner.

Physiotherapy, massage, chiropractic treatment and osteopathy are common examples of therapeutic treatment.

Amendment History

Date of amendment Part Comment
29 November 2013 Decision,Reason for Decision, Legislative References, Keywords Amended for clarity and to correct legislative reference.

Date of decision:  31 July 2001

Legislative References:
Income Tax Assessment Act 1936
   section 159P
   subsection 159P(4)

Case References:
Case R95 / Case 148
   84 ATC 633
   (1984) 27 CTBR (NS)

Case A53 / Case 30
   69 ATC 313
   (1969) 15 CTBR (NS)

Case T67 / Case 31
   (1967) 18 TBRD 346
   (1967) 14 CTBR (NS)

Keywords
Deductions & expenses
Medical expenses
Medical expenses rebates
Rebates and offsets

Business Line:  Small Business/Individual Taxpayers

Date of publication:  21 August 2001

ISSN: 1445-2782

history
  Date: Version:
  31 July 2001 Original statement
  29 November 2013 Updated statement
You are here 27 October 2016 Withdrawn