ATO Interpretative Decision

ATO ID 2001/626 (Withdrawn)

Income Tax

• This ATO ID is withdrawn as the interpretative issue is covered by ATO ID 2001/243.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is the taxpayer entitled to a medical expenses tax offset under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) for payments made to provide training to therapists so they can administer a specific type of therapy?

Decision

No. The taxpayer is not entitled to a medical expenses tax offset under section 159P of the ITAA 1936 for payments made to provide training to therapists so they can administer a specific type of therapy, as they are preliminary expenses which do not qualify as medical expenses.

Facts

The taxpayer' dependant has a medical condition that requires therapy.

A specific type of therapy is available for people with this condition. This therapy would qualify as 'therapeutic treatment' under subsection 159P(4) of the ITAA 1936.

Those people who will be administering the therapy have been provided training to give them the necessary skills needed to administer this therapy.

The taxpayer paid the cost of providing this training.

Reasons for Decision

Subsection 159P(3A) of the ITAA 1936 provides that a tax offset is allowable to a taxpayer whose net medical expenses in the year of income exceed $1250.

The medical expenses must be paid by the taxpayer in respect of themselves or their dependant.

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

In Case R95 84 ATC 633; (1984) 27 CBTR (NS) Case 148, the Administrative Appeals Tribunal found that 'therapeutic treatment' necessitated the exercise of professional skill in the medical field in a way which normally involved the person administering the treatment using drugs or physical or mental processes for the purpose of curing or managing the disease or disorder.

The expenses incurred by the taxpayer are not payments for therapeutic treatment. They are more in the nature of preliminary expenses incurred to enable the future therapists to learn the necessary skills which will allow them, at a later stage, to administer the treatment.

The training expenses are considered to be preliminary expenses that are incurred before the therapeutic treatment is provided and are not medical expenses under subsection 159P(4) of the ITAA 1936. The taxpayer is not entitled to a medical expenses tax offset under section 159P of the ITAA 1936.

Year of income:  Year ended 30 June 2001

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

Case References:
Case R95
   84 ATC 633

Related ATO Interpretative Decisions
ATO ID 2001/182
ATO ID 2001/131

Keywords
Medical expenses
Medical expenses rebates
Alternative health expenses
Rebates

Business Line:  Small Business/Individual Taxpayers

Date of publication:  28 November 2001

ISSN: 1445-2782