ATO Interpretative Decision

ATO ID 2001/155

Income Tax

• This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Are a mattress replacement system and recline lift chair medical or surgical appliances for the purposes of the medical expenses tax offset (also referred to as a 'rebate') under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936)?

Decision

No, the mattress replacement system and recline lift chair are not medical or surgical appliances for the purposes of the medical expenses tax offset under section 159P of the 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) of the 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)(f) of the ITAA 1936 includes payments made in respect of a medical or surgical appliance prescribed by legally qualified medical practitioner in the definition of medical expenses.

Taxation Ruling TR 93/34 explains the meaning of a 'medical or surgical appliance' for the purposes of paragraph 159P(4)(f) of the ITAA 1936 as an instrument, apparatus or device which is manufactured as, distributed as or generally recognised to be an aid to the function or capacity of a person with a disability or an illness.

To be an aid to function or capacity, the item must help the person with the illness or disability perform the activities of daily living: paragraph 4 of Taxation Ruling TR 93/34. An item that merely has a therapeutic purpose, such as relieving, healing or preventing a medical condition, is not considered to be a medical or surgical appliance within the meaning of paragraph 159P(4)(f) of the ITAA 1936: paragraph 7 of Taxation Ruling TR 93/34.

In this case, the therapeutic mattress is clearly used in therapeutic treatment. However, the mattress does not help the taxpayer perform everyday activities as it does not aid the taxpayer's physical movement. Similarly, although the recline lift chair provides comfort and relieves the taxpayer's pain, the chair is not generally recognised as assisting the taxpayer in performing any activities. Accordingly, the mattress replacement system and the recline lift chair are not considered to be aids to function or capacity, and therefore, are not 'medical or surgical appliances' for the purposes of paragraph 159P(4)(f) of the ITAA 1936.

Legislative References:
Income Tax Assessment Act 1936
   section 159P
   subsection 159P(1)
   paragraph 159P(4)(f)

Related Public Rulings (including Determinations)
TR 93/34

Related ATO Interpretative Decisions
ATO ID 2001/154 ATO ID 2001/156

Keywords
Rebates
Deductions & expenses
Medical expenses
Medical expenses rebates
Medical & surgical appliances

Business Line:  Small Business/Individual Taxpayers

Date of publication:  1 August 2001

ISSN: 1445-2782