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Edited version of private ruling
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Ruling
Subject: Medical expense tax offset
Can you include the cost of rental accommodation for the purposes of calculating a medical expense tax offset while you are under the supervision of a medical specialist?
No.
Relevant facts and circumstances
You were diagnosed as having an illness and your family was unable to care for you. As a result, you had to seek alternative accommodation.
You underwent an ACAT assessment, following which you obtained rental accommodation. You receive some government support towards the cost of the accommodation but it does not cover the full amount you are required to pay.
The accommodation obtained is not special care accommodation.
Reasons for decision
Section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) provides a tax offset to a taxpayer whose net medical expenses exceed a certain threshold. For the year ended 30 June 2010 the threshold was $1,500.
The term medical expenses is widely defined in section 159P(4) of the ITAA 1936 for the purposes of the tax offset to cover payments to hospitals, doctors, nurses, chemists, dentists, dental mechanic, opticians and optometrists in respect of an illness, injury, operation or medical or dental procedure. It also covers payments for therapeutic treatment, medical or surgical appliances, the maintenance of a trained guide dog and remuneration paid to an attendant of an invalid or blind person.
While we accept that you are required to live in the accommodation because of your illness, the expense does not fall within the definition of a medical expense. Accordingly, you are unable to include the cost of your rental accommodation in any calculation of the medical expense tax offset.
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