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Edited version of private ruling

Authorisation Number: 1011589296121

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Ruling

Subject: Medical expense tax offset

1. Are you entitled to include the cost of prescription and non prescription medication prescribed by a doctor in your calculation of the medical expenses tax offset?

Yes.

2. Are you entitled to include the cost of gap payments for physiotherapy and chiropractor treatments, where you have been referred by a doctor, in your calculation of the medical expenses tax offset?

Yes.

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

The scheme commences on:

1 July 2009

Relevant facts and circumstances

The arrangement that is the subject of the private ruling is described below. This description is based on the following documents. These documents form part of and are to be read with this description. The relevant documents are:

A family member suffers from an illness.

The family member's condition requires medical treatment.

Your doctor has prescribed a number of medications for the illness.

You suffer from chronic pain due to degenerative process within your body.

Your doctor has referred you to a chiropractor and physiotherapy to have treatment to manage the condition.

Your doctor has prescribed prescription and non prescription anti medications to treat this condition.

You purchase all the prescription and non prescription medication from a chemist.

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 159P.

Income Tax Assessment Act 1936 Subsection 159P(4)

Income Tax Assessment Act 1936 paragraph 159P(4) (a)

Income Tax Assessment Act 1936 paragraph 159P(4) (d)

Reasons for decision

A medical expenses 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 for themselves or a dependant who is an Australian resident.

The medical expenses tax offset is only available if the amount of medical expenses (reduced by any entitlement to reimbursement from a health fund or government authority) exceeds $1,500 in the income year. The tax offset is 20% of the amount by which the net medical expenses exceeds the relevant amount mentioned for each income year.

Subsection 159P(4) of the ITAA 1936 defines which medical expenses are allowable in the calculation of the offset.

Paragraph (a) includes payments to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation.

In your case, you and your family member suffer from a medical condition or illness which requires medications which is prescribed by a qualified medical practitioner. You purchase the medications from the chemist to assist in the treatment of these conditions. Because you purchase the medication from a chemist and it is in respect of an illness these expenses are eligible to be included in calculation of the medical expenses tax offset.

Chiropractor and physiotherapy treatment

Subsection 159P(4) of the ITAA 1936 defines which medical expenses are allowable in the calculation of the offset. 

Paragraph (d) includes payments for therapeutic treatment administered by direction of a legally qualified medical practitioner.

Treatments provided by a chiropractor and a physiotherapy are generally considered to be therapeutic in nature.

You were referred by your legally qualified medical practitioner to a specific chiropractor and physiotherapist for the treatment of a specified aliment. As discussed above, the costs incurred for these specific therapeutic treatments do qualify as medical expenses under section 159P of the ITAA 1936 and can be included when calculating the medical expenses tax offset.

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