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Edited version of private ruling
Authorisation Number: 1011715199046
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Ruling
Subject: Medical expenses tax offset
Question 1
Does the cost of prescription and non-prescription medications purchased at a chemist qualify as a medical expense for the purpose of calculating the medical expenses tax offset?
Answer
Yes.
Question 2
Does the cost of prescription and non-prescription medications purchased at a health food store or supermarket qualify as a medical expense for the purpose of calculating the medical expenses tax offset?
Answer
No.
Question 3
Does the cost of massages qualify as a medical expense for the purpose of calculating the medical expenses tax offset?
Answer
No.
This ruling applies for the following period
Year ended 30 June 2010
The scheme commenced on
1 July 2009
Relevant facts
You have been diagnosed with an illness.
You have sought medical advice and also advice from alternative therapists in an attempt to alleviate your symptoms.
Your doctor has prescribed medications for you and also suggested you supplement with over the counter medications and mineral supplements.
You purchase medications and mineral supplements through the chemist, health food stores and supermarkets.
Your chiropractor advised you that your adjustments were not satisfactory because you were too stiff. You decided to have regular massages prior to your chiropractic appointments. You subsequently stopped your chiropractic appointments.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Reasons for decision
Medications
A medical expenses tax offset is available under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where you pay medical expenses in an income year for yourself and/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. The tax offset is 20% of the amount by which the net medical expenses exceeds $1,500.
Medical expenses are defined in 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 (paragraph (a) of the definition).
Paragraph 159P(4)(d) of the ITAA 1936 includes in the definition of medical expense, a payment, 'for therapeutic treatment administered by direction of a legally qualified medical practitioner
In your case, the costs incurred filling doctor's prescriptions and purchasing other medications from a chemist in respect to your illness meet the definition of medical expenses. However, medications purchased from a health food store or supermarket do not meet the definition in subsection 159P(4). Therefore you are entitled to include prescription and non-prescription medications purchased from a chemist in your calculation for the medical expenses tax offset. However, medications purchased from a health food store or supermarket cannot be included in your calculation.
Massage
It was held in Case A53 69 ATC 313; (1969) 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.
In your case, you started having massages after your chiropractors told you that you were too stiff for the adjustments to be satisfactory. Consequently as you were not having the massages at the direction of a legally qualified medical practitioner, the expense does not meet the definition of a medical expense under paragraph 159P(4)(d) of the ITAA 1936. Therefore, you are not entitled to include the cost of massages in a calculation for the medical expenses tax offset.
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