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Edited version of private ruling
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Ruling
Subject: Medical expenses tax offset - Naturopath
Do expenses incurred for naturopathy treatment, including medicines dispensed by the naturopath qualify as medical expenses for medical expenses tax offset purposes?
Yes.
Relevant facts
You suffer from a medically diagnosed disease. Your GP has referred you for complementary therapeutic treatment to a particular naturopath for an indefinite period.
The naturopath is your family's long-term and trusted natural health practitioner. You have a long established rapport with the naturopath which allows you to work successfully with them.
The naturopathic treatment includes medicines dispensed by the naturopath which enable you to cope with side effects of both the symptoms of the disease as well as the side effects of specialist prescribed medication. This assists you to continue working.
The naturopath receives all of your test results which have been ordered by other attending health professionals, and your GP checks on the progress of your therapeutic treatment when you visit him.
You are not a member of a private health fund, and you cannot claim the costs of the therapeutic treatment through Medicare.
You keep receipts for all of your medical expenses.
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.
For the year ended 30 June 2008, the amount of the tax offset is calculated as 20% of the excess of net medical expenses over the threshold of $1,500. There is no upper limit on the amount you can claim.
The term medical expenses is defined in subsection 159P(4) of the ITAA 1936. Paragraph (d) of the definition includes payments for therapeutic treatment administered by direction of a legally qualified medical practitioner.
It was held in Case A53 69 ATC 313; 15 CTBR (NS) Case 30 that the mere suggestion or recommendation by a medical practitioner that the patient undergoes therapeutic treatment is not sufficient for the payment to qualify as medical expenses. The patient would have to be referred by a medical practitioner to a particular person for specific treatment.
Although the treatment must be administered by direction of a legally qualified medical practitioner, the treatment need not be administered by such a practitioner.
In your case you were referred by your legally qualified medical practitioner to a specific naturopath for treatment with your progress being monitored by your doctor. You have incurred payments in respect to yourself, and the expenses have not been reimbursed.
Therefore, the expenditure you have incurred through your visits to the naturopath qualify as eligible medical expenses within the meaning of section 159P(4) of the ITAA 1936 and you are entitled to include the cost in your calculation of the medical expense tax offset.
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