Edited version of private ruling

Authorisation Number: 1011599196105

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Ruling

Subject: Medical expense Tax Offset

Question 1

Are you entitled to claim a medical expenses tax offset in respect of the cost of purchase and installation of a stair lift at your residence?

Answer

Yes

This ruling applies for the following period:

Year ended 30 June 2010

The scheme commences on:

1 July 2009

Relevant facts and circumstances

You are an Australian resident.

Your spouse has a significant medical condition.

You installed a chairlift for your spouse's use when you purchased your unit.

You provided a letter from your spouse's doctor supporting the installation of an inclinator.

You provided documentation from the supplier verifying the purchase and installation of the chairlift.

Summary

The expenses paid for the purchase and installation of a stair lift qualify as 'medical expenses' for the purpose of the medical expenses tax offset.

Detailed reasoning

Subsection 159(3A) of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a tax offset is allowable to a taxpayer whose net medical expenses in the year of income exceed $1,500.

Net medical expenses are the medical expenses a taxpayer has paid less any refunds they receive or could have received, from Medicare or a private health fund.

A tax payer can claim a tax offset of 20% of the net expenses paid in the year of income in excess of $1,500. The medical expenses must be paid by the taxpayer in respect of themselves or their dependant.

Medical expenses are defined in subsection 159P(4) of the ITAA 1936. Paragraph (f) of the definition includes payments 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 being an instrument, apparatus or device which is manufactured, distributed or generally recognised as an aid to the function or capacity of a person with a disability or an illness.

An appliance is an aid to function or capacity if it helps the person with the illness or disability to perform the activities of daily living.

TR 93/34 also provides that, generally, a household or commercial appliance is not a 'medical or surgical appliance' and that we need to look at the character of the appliance not the purpose for which it is proposed or used.

The stair lift has been manufactured, is sold specially and is generally recognised as an aid to those people who have impaired mobility. Its character is to aid a mobility impaired person overcome obstacles such as stairs.

The purchase of the chair lift was recommended for your wife by a legally qualified medical practitioner for the purpose of improving her quality of life and is used to aid her mobility in allowing her access to your home. The stair lift meets the requirements of a medical or surgical appliance.

Therefore, the cost of purchasing and installing the stair lift is considered a medical expense for calculating the medical expenses tax offset under section 159P of the ITAA 1936.

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