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Edited version of private ruling
Authorisation Number: 1011537052726
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Ruling
Subject: Medical expenses tax offset
1. Will the nappies you have purchased from a chemist qualify as eligible medical expenses for the purpose of the medical expenses tax offset?
Yes.
2. Will the nappies you have purchased from retail outlets or supermarkets qualify as eligible medical expenses for the purpose of the medical expenses tax offset?
No.
This ruling applies for the following periods:
Year ending 30 June 2011
Year ending 30 June 2012
Year ending 30 June 2013
Year ending 30 June 2014
Year ending 30 June 2015
The scheme commences on:
1 July 2010
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
Your son suffers from a medical condition which makes him incontinent.
A letter from his paediatrician confirms his medical condition.
Because of his medical condition your son continues to wear nappies day and night.
You purchase the nappies from a chemist and also from retail outlets/supermarkets.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P.
Reasons for decision
Summary
The expense you have incurred on nappies qualifies as an eligible medical expense, for the purpose of calculating your medical expenses tax offset, where they have been purchased from a chemist. Any other expense on purchasing nappies other than from a chemist such as from a supermarket or other retail outlets does not qualify as a medical expense.
Detailed reasoning
A medical expenses tax offset is available under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where you incur medical expenses in an income year for yourself or a dependant who is an Australian resident.
Medical expenses are defined in subsection 159P(4) of the ITAA 1936. Paragraph 159P(4)(a) of the ITAA 1936 includes payments made to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation.
The meaning of the term illness was discussed by Taxation Board of Review No.3 in Case Q21 83 ATC 77; 26 CTBR (NS) 570 Case 85. Dr Gerber (Member) stated that the term includes any condition marked by a pronounced deviation from the normal healthy state.
Paragraph 6 of Taxation Ruling IT 2146 states that claims should be accepted where the taxpayer has provided evidence from a legally qualified medical practitioner that the expenditure is in respect of an illness and that the product was purchased from a chemist.
Where the nappies have been purchased from a chemist, they will qualify as a medical expense as they are in respect to an illness.
In your case, your son's paediatrician confirmed your son's medical condition. Therefore, the expense you have incurred on nappies qualifies as an eligible medical expense, for the purpose of calculating your medical expenses tax offset, where they have been purchased from a chemist. Any other expense on purchasing nappies other than from a chemist such as from a supermarket or other retail outlets does not qualify as a medical expense.
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