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Edited version of private ruling
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Ruling
Subject: Medical expenses tax offset
Can you claim the medical expense tax offset for payments made to your naturopath?
No.
This ruling applies for the following period
Year ended 30 June 2014
The scheme commenced on
1 July 2009
Relevant facts and circumstances
You are an Australian resident for tax purposes.
You have consulted and used the services of the registered naturopath in relation to several health issues you have.
You have retained all your receipts for your expenses and these expenses exceed $1,500 in the 2010 income year.
The naturopathic treatment was not referred by, nor is it overseen, by a legally qualified medical practitioner.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P(1)
Income Tax Assessment Act 1936 Section 159P(4).
Reasons for decision
While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.
A medical expenses tax offset is available to a taxpayer under subsection 159P(1) of the Income Tax Assessment Act 1936 (ITAA 1936) where the taxpayer pays medical expenses in an income year for themselves or a dependant who is an Australian resident, to the extent that they are not reimbursed, or are eligible to be reimbursed, from a government or public authority or a society, association or fund.
The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed $1,500 for the income year.
Medical expenses are defined in subsection 159P(4) of the ITAA 1936 to include:
· payments to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation and also
· payments for therapeutic treatment administered by direction of a legally qualified medical practitioner.
Therapeutic treatment as a concept is concerned with healing or curing, rather than preventing the need for therapy. 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.
The therapeutic treatment must be administered by direction of a legally qualified medical practitioner. For treatment to be regarded as being administered by direction of a legally qualified medical practitioner, the treatment needs to be advised, prescribed or ordered by a legally qualified medical practitioner. It also requires monitoring to some extent by the medical practitioner, or in some cases, self-monitoring. 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 to a particular person for the therapeutic treatment. Although the treatment must be administered by direction of a legally qualified medical practitioner, the treatment need not be administered by such a practitioner.
In your case, a qualified medical practitioner did not refer or suggest that you see a naturopath for treatment. A doctor does not monitor the use or application of your treatment by the naturopath, who is not considered to be a legally qualified medical practitioner. Therefore, these costs are not considered to be medical expenses as defined in subsection 159P(4) of the ITAA 1936.
Accordingly, the costs of your naturopathic treatment do not qualify as medical expenses for the purposes of the medical expenses tax offset.
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