Edited version of private ruling

Authorisation Number: 1011529993245

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Ruling

Subject: Medical expenses offset

Question

Do the costs incurred by you in purchasing an electric wheelchair qualify as medical expenses for the purposes of the medical expenses tax offset?

Answer

Yes.

This ruling applies for the following period

Year ended 30 June 2010

The scheme commenced on

1 July 2009

Relevant facts

You suffer from a degenerative condition, which has limited your ability to walk independently.

You have been continually using an electric wheelchair instead of walking.

The electric wheelchair also enables you to work in safety at your current place of employment.

You were assessed by an occupational therapist for the need to acquire a new power wheelchair.

You have a referral from a medical practitioner advising that you require a powerchair for your continued mobility and employment.

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 159P

Income Tax Assessment Act 1936 Subsection 159P(4)

Reasons for decision

Summary

The costs incurred by you in purchasing the wheelchair are considered medical expenses for calculating the medical expenses tax offset.

Detailed reasoning

Medical expenses tax offset

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. Paragraph (f) of the definition includes payments made in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner.

Taxation Ruling TR 93/34 explains the meaning of a 'medical or surgical appliance' as being an instrument, apparatus or device which is manufactured, distributed or generally recognised as an aid to the function or capacity of a person with a disability or an illness.

An appliance is an aid to function or capacity if it helps the person with the illness or disability to perform the activities of daily living.

Taxation Ruling TR 93/34 also provides that generally, a household or commercial appliance is not a 'medical or surgical appliance'; and that we need to look at the character of the appliance, not the purpose for which it is proposed or used.

The wheelchair has been manufactured, is sold specifically and is generally recognised as an aid to those people who have mobility impairment. Its character is to aid a mobility impaired person.

The purchase and use of the wheelchair was prescribed for you by a legally qualified medical practitioner and is used to aid your mobility. The wheelchair therefore meets the requirements of a 'medical or surgical appliance'.

TR 93/34 also lists wheelchairs as 'medical or surgical appliances' for the purposes of the medical expenses tax offset.

The costs incurred in purchasing the wheelchair is considered a medical expense for calculating the medical expenses tax offset under section 159P of the ITAA 1936.

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