Edited version of private ruling

Authorisation Number: 1011574668159

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Ruling

Subject: Medical expenses tax offset

Are you entitled to include the expenses in purchasing dietary supplements in the calculation of your medical expenses tax offset?

Yes.

This ruling applies for the following period

Year ended 30 June 2010

Year ended 30 June 2011

Year ended 30 June 2012

Year ended 30 June 2013

The scheme commenced on

1 July 2009

Relevant facts

You are an Australian resident for income tax purposes.

For many years you have suffered from an illness.

You were advised by your doctor who is a qualified medical practitioner to see an accredited practising dietician.

The dietician prescribed a course of dietary supplements.

The medications prescribed by the dietician are available from a company that is a non-chemist entity and can only be acquired with an authority from an accredited practising dietician.

Your doctor monitors your condition through examinations and is in contact with the dietician to further monitor your condition.

Since commencing treatment prescribed by the dietician you have been able to return to work and resume a normal lifestyle.

You are not entitled to a rebate for the cost of the vitamin supplements through Medicare or through your private medical fund.

You have retained all your receipts and records for the expenses incurred.

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 159P.

Income Tax Assessment Act 1936 Subsection 159P(4).

Reasons for decision

A medical expense tax offset is available to a taxpayer under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where the taxpayer incurs medical expenses in an income year for themselves or a dependant who is an Australian resident. The medical expenses tax offset is 20% of the amount by which the net medical expenses exceeds a threshold amount for that income year. The threshold amount for the 2009-10 income year was $1,500.

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 treatments administered by direction of a legally qualified medical practitioner.

If however, medication was purchased from other outlets (for example, a health food store, supermarket or other general outlet), the expenses will only qualify as a medical expense if the treatment is therapeutic and administered by direction of a legally qualified medical practitioner. Thus, there are two tests which must be satisfied.

Therapeutic treatment

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.

Administration by a legally qualified medical practitioner

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.

Your case

In your case, you are an Australia resident and have an illness. Your doctor who is a qualified medical practitioner has advised you to see an accredited practising dietician. The dietician has prescribed dietary supplements that are available from a non-chemist entity, and can only be acquired with an authority from an accredited practising dietician. Your doctor monitors your condition through examinations and is in contact with the dietician. Therefore, the treatment is considered to be therapeutic and it is administered by a medical practitioner for the purposes of section 159P of the ITAA 1936.

Accordingly, you are entitled to include in the calculation of a medical expenses tax offset under section 159P of the ITAA 1936, the expenses you incurred in purchasing the dietary supplements.

Additional information

The threshold above which a taxpayer can claim the net medical expenses tax offset will be increased from $1,500 to $2,000 and the threshold will commence to be annually indexed to the Consumer Price Index, with effect from 1 July 2010. The first indexation adjustment to the threshold will take place on 1 July 2011. The offset currently allows taxpayers to receive a tax offset equal to 20% of net unreimbursed eligible medical expenses above $1,500.

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