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Edited version of private ruling
Authorisation Number: 1011581805564
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Ruling
Subject: Medical expenses tax offset
Are you entitled to a medical expenses tax offset for the excess costs you paid for modifications made to your bathroom?
No.
This ruling applies for the following period:
Year ended 30 June 2010
The scheme commences on:
1 July 2009
Relevant facts and circumstances
Your dependent spouse was diagnosed with a medical condition.
Your spouse was assessed as requiring high level care.
Your spouse's condition deteriorated requiring the home carer to take over more of the personal aspects of the caring.
An occupational therapist conducted an inspection of your home, and it was found that the bathroom door would need to be widened and the bathroom and shower layout would need to be altered.
The bathroom setup placed carers including yourself and your spouse at risk of injury and the premature admission of your spouse into residential care due to the unsafe environment.
The alterations were done to comply with Workplace Health and Safety requirements to enable the carer to carry out their role.
Plans were drawn up by an architect for the required alterations.
The cost of the work was partly funded by a program.
You paid the costs for the widening of the doorway and the shortfall in the cost of the plumbers work.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 159(P)
Income Tax Assessment Act 1997 Section 159P(1)
Income Tax Assessment Act 1997 Section 159P(4)
Reasons for 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.
Subsection 159P(4) of the ITAA 1936 defines medical expenses which are eligible for the medical expenses tax offset. Paragraph (f) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 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 an instrument, apparatus or device which is manufactured as, or distributed as, or generally recognised to be an aid to the function or capacity of a person with a disability or illness.
This definition looks to the character of the appliance, not the purpose for which it is prescribed or used. It is not sufficient that a medical practitioner prescribes an appliance for medical or surgical ends.
In your case, alterations have been made to your bathroom because the setup was deemed to be an unsafe environment and placed carers including yourself and your spouse at risk of injury. The alterations have a general domestic or household purpose. Even though required due to the medical condition of your spouse, building alteration expenses are not payments for an instrument, apparatus or device recognised as an aid to the function or capacity of a disabled person. Therefore, the alterations are not considered medical or surgical appliances for the purposes of paragraph (f) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936.
Accordingly, expenditure on building alterations is not a payment for medical treatment. The excess costs you paid for modifications made to your bathroom are not eligible medical expenses for the purpose of the medical expenses tax offset.
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