ATO Interpretative Decision

ATO ID 2002/747

Income Tax

• 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 expenses incurred in relation to voice therapy?

Decision

Yes. The taxpayer is entitled to a medical expenses tax offset under section 159P of the ITAA 1936 for expenses incurred in relation to voice therapy, as it is therapeutic treatment administered by direction of a legally qualified medical practitioner.

Facts

The taxpayer's voice had deteriorated and as a result they suffered soreness and hoarseness.

The taxpayer was referred by a legally qualified medical practitioner to a specific speech pathologist for a course of voice therapy. The speech pathologist was not a legally qualified medical practitioner.

The taxpayer incurred expenses in undertaking the voice therapy. They received only partial reimbursement of these expenses from their private health insurance.

Reasons for Decision

A medical expense tax offset is available to a taxpayer under section 159P of the ITAA 1936, where the taxpayer incurs medical expenses for themselves or a dependant who is an Australian resident. The medical expenses tax offset is only available if the amount of medical expenses (reduced by any entitlement to reimbursement from a health fund or government authority) exceeds $1250. The tax offset is 20% of the amount by which the net medical expenses exceeds $1250.

Medical expenses are defined in subsection 159P(4) of the ITAA 1936 to include a payment 'for therapeutic treatment administered by direction of a legally qualified medical practitioner' (paragraph (d) of the definition).

Therapeutic treatment as a concept is concerned with healing or curing, rather then preventing the need for therapy (Case T67 (1967) 18 TBRD 36; (1967) 14 CTBR (NS) Case 31). 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 the disease (Case R95 84 ATC 633; (1984) 27 CTBR (NS) Case 148).

The Commissioner accepts that the voice therapy is therapeutic treatment for the purposes of subsection 159P(4) of the ITAA 1936.

The therapeutic treatment must be administered by direction of a legally qualified medical practitioner. A mere suggestion or recommendation by a doctor to a patient that the patient undergo therapeutic treatment is not enough for the associated expenses to qualify as medical expenses. The patient must be referred by a doctor to a particular person for the therapeutic treatment (Case A53 69 ATC 313; (1969) 15 CTBR (NS) Case 30).

The taxpayer was referred, by a legally qualified medical practitioner, to a specific speech pathologist for voice therapy. In these circumstances the taxpayer is entitled to take the expenses incurred into account in determining their entitlement to a medical expenses tax offset under section 159P of the ITAA 1936.

Year of income:  Year ended 30 June 2001 Year ending 30 June 2002

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

Case References:
Case T67 / Case 31
   (1967) 18 TRBD 346
   (1967) 14 CTBR (NS) 170

Keywords
Medical expenses
Medical expenses rebates

Business Line:  Small Business/Individual Taxpayers

Date of publication:  31 July 2002

ISSN: 1445-2782