ATO Interpretative Decision

ATO ID 2001/243

Income Tax

Medical expenses tax offset - therapeutic treatment
FOI status: may be released

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This ATO ID is amended to remove reference to superseded dollar threshold amount and to reconcile current terminology ('tax offset') with legislative wording of section 159P of the ITAA 1936.

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

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 for the purposes of the medical expenses tax offset (also referred to as a 'rebate').

Reasons for Decision

Section 159P of the ITAA 1936 provides for a rebate 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 rebate is equal to 20% of the expenditure that exceeds the threshold amount..

Subsection 159P(4) of the ITAA 1936 defines "medical expenses". Paragraph 159P(4)(d) of the ITAA 1936 includes in the definition of medical expense, a payment, '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 paragraph 159P(4)(a), 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.

Date of decision: 31 July 2001

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

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
Medical expenses
Medical expenses rebates
Rebates

Business Line: Small Business/Individual Taxpayers

Date of publication: 21 August 2001

ISSN: 1445-2782

history

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

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