ATO Interpretative Decision

ATO ID 2001/29

Income Tax

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

Issue

Does the cost of 24-hour home care incurred by a person suffering from Alzheimer's Disease qualify as a medical expense under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936)?

Decision

No. The cost of 24-hour home care generally does not qualify as a medical expense under section 159P (ITAA 1936).

Facts

The taxpayer has been diagnosed with Alzheimer's Disease. The taxpayer is not permanently confined to a bed or an invalid chair. Because of the taxpayer's state of mind the taxpayer is housebound and is unable to take care of themself. After a short period in a nursing home the decision was made to return the taxpayer to their home with 24-hour attendant/home care.

A private healthcare service company is caring for the taxpayer at home. The care provided by the company is on a 24-hour basis by a team of trained dementia carers. A team leader who is a registered nurse supervises the team. There are doctors on staff. The carers are responsible for dressing, bathing and all associated personal and hygiene care, cooking and feeding, full-time supervision of the taxpayer's behaviour including managing the daily routines, preventing self harm and night-time supervision whilst the taxpayer is asleep.

Reasons For Decision

Subsection 159P(4) of the Income Tax Assessment Act 1936 defines 'medical expenses'. Paragraph (a) of the definition includes payments: 'to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation.' Subsection 159P(5) Income Tax Assessment Act 1936 extends that definition to include employers (not being a public or private hospital) of such people.

The company supplies personnel who are trained in dementia care but who are not necessarily legally qualified nurses. Generally, the payments are not being made to a legally qualified nurse or to the employer of a legally qualified nurse for the provision of services or treatment by a legally qualified nurse. Therefore the payments do not qualify as a medical expense under section 159P Income Tax Assessment Act 1936.

However, it may be possible that particular payments are made to the employer of a doctor or legally qualified nurse for the provision of services or treatment by a legally qualified nurse or doctor. This might be the case where the patient was cared for by a legally qualified nurse, or where a legally qualified nurse or doctor was contacted by the care giver to provide particular services for which payment was required.

As the taxpayer is not blind or permanently confined to bed or an invalid chair the payments do not qualify as a medical expense as required under paragraph 159P(4)(h) Income Tax Assessment Act 1936.

Legislative References:
Income Tax Assessment Act 1936
   subsection 159P(4)
   subsection 159P(5)

Case References:
Case S57
   85 ATC 412

Keywords
Aged care expenses
Medical expenses rebates
Nursing expenses

Business Line:  Small Business/Individual Taxpayers

Date of publication:  4 June 2001

ISSN: 1445-2782