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Edited version of private ruling
Authorisation Number: 1011616906678
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Ruling
1. Do expenses you paid for an educational audiology assessment qualify as a medical expense for the purposes of the medical expenses tax offset?
No.
2. Do expenses you paid for speech therapy sessions qualify as medical expenses for the purposes of the medical expense tax offset?
Yes.
This ruling applies for the following periods:
Year ended 30 June 2010
Year ending 30 June 2011
The scheme commences on:
1 July 2009
Relevant facts and circumstances
You have a dependent child who was experiencing learning difficulties.
You were referred by your child's school to an audiologist.
The fee charged by the audiologist was not claimable from Medicare or a private health fund.
Your doctor referred you to a speech pathologist with five sessions covered by Medicare. You will pay out of pocket expense for the remaining sessions.
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 the2009-10 income year. Please note that the threshold amount may change in future income years.
The term medical expenses are defined in paragraph (a) of subsection 159P(4) of the ITAA 1936 to include payments to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital in respect of an illness or operation.
An audiologist is not considered to be a legally qualified medical practitioner. Therefore, the costs you have paid for the services of the audiologist do not qualify as medical expenses under paragraph (a) of the definition and cannot be included when calculating the medical expenses tax offset.
Therapeutic treatment
Paragraph (d) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 includes payments made 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 a legally qualified medical practitioner, to a specific speech pathologist so that your child could receive speech therapy treatment.
Therefore, the out of pocket expenses you have paid through visits to the speech pathologist qualify as an eligible medical expense within the meaning of section 159P(4) of the ITAA 1997 and you are entitled to include the cost in your calculation of the medical expenses tax offset.
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