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Edited version of private ruling
Authorisation Number: 1011564432536
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Ruling
Subject: Work related travel and medical expenses
Question
Are you entitled to a deduction for travel to and from medical appointments?
Answer
No.
This ruling applies for the following periods
Year ended 30 June 2010
Year ended 30 June 2011
Year ended 30 June 2012
Year ended 30 June 2013
Year ended 30 June 2014
The scheme commenced on
1 July 2009
Relevant facts
You have a disability.
Your employer requires that you have an independent medical case manager.
You use your motor vehicle to attend doctor appointments, physio sessions and an orthopaedic surgeon.
You attend these appointments accompanied by your case manager.
You attend the appointments when you finish work for the day, and the time you spend at them is unpaid but is a requirement of your employment.
You pay for the appointments.
You are not reimbursed for the travel.
Relevant legislative provisions
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.
The courts have considered the meaning of 'incurred in gaining or producing assessable income'. In Ronpibon Tin NL Tong Kah Compound NL v. Federal Commissioner of Taxation (1949) 78 CLR 47, the High Court stated that:
For expenditure to form an allowable deduction as an outgoing incurred in gaining or producing assessable it must be incidental and relevant to that end. The words "incurred in gaining or producing the assessable income" mean in the course of gaining or producing such income.
In Rossitto v FCT 39 ATR 1019, 98 ATC 2093 (Rossitto's Case) the taxpayer suffered an injury at work and was paid workers compensation for the difference between what he was able to earn in suitable employment and what he would have earned had he been able to continue his job as an engineer. The payment of compensation was conditional on his maintenance of a rehabilitation program.
The taxpayer claimed motor vehicle expenses to see his physiotherapist and doctor, it was held that even though it was mandatory that he undertake the rehabilitation program, the medical expenses were a prerequisite of receiving compensation and not necessarily incurred in the gaining or production of his assessable income.
Your case is similar to Rossitto's Case. The cost of doctor appointments, physio sessions and an orthopaedic surgeon is not incurred in deriving your assessable income and is private in nature. You cannot therefore claim a deduction for the travel expenses incurred in the treatment of your illnesses under section 8-1 of the ITAA 1997.
General Advice
Under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) a tax offset is available to a resident taxpayer whose net medical expenses paid in the year of income exceed $1,500. The amount of the rebate is equal to 20% of the expenditure that exceeds the threshold amount.
Net medical expenses are the medical expenses a taxpayer has paid less any refunds they received, or could have received, from Medicare or a private health fund.
Medical expenses include payments made to a legally qualified chemist and therapeutic treatment administered by direction of a legally qualified medical practitioner.
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