Edited version of private ruling

Authorisation Number: 1011819850037

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Ruling

Subject: Medical expenses tax offset - eye surgery

Question:

Does the cost of your intraocular lens eye surgery qualify as a medical expense for the purposes of the medical expenses tax offset?

Answer:

Yes.

Relevant facts

You suffer from an eye disorder of short sightedness and astigmatism, resulting in very bad vision in both eyes. Your condition was not suitable for laser eye surgery because of your genetic pre disposition to keratinosis, which put you at risk for laser eye surgery.

Your doctor advised you to have the surgery to correct your vision.

You wore glasses and contact lenses at different times prior to the surgery, but neither were successful in correcting your vision. You did not have the surgery so that you would not have to wear glasses. You still wear glasses post-op for reading.

The surgery was to change the function of the eye and not the appearance.

The procedure is not eligible for reimbursement by Medicare.

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 pays medical expenses in an income year for themselves or a dependant who is an Australian resident. The medical expense tax offset is 20% of the amount by which the net medical expenses exceed $2,000 for the 2010-11 financial year.

Medical expenses are defined in subsection 159P(4) of the ITAA 1936. Paragraph (a) of the definition includes payments made to a legally qualified medical practitioner in respect of an illness or operation. However cosmetic operations are generally ineligible medical expenses.

The term 'illness' is not defined in the ITAA 1936 and therefore it is necessary to look at the ordinary meaning of the term. An illness includes a sickness, disease, or disorder of the body or the mind and involves a deviation from the normal healthy state. An 'illness' would include eye disorders in the nature of short sightedness, long sightedness or astigma.

The term 'operation' is not defined in the ITAA 1936 and therefore it is again necessary to look at the ordinary meaning of the term. An 'operation' in a medical sense means an act or series of acts performed on the body of a patient for their relief or to restore them to a normal condition. It involves the use of surgical instruments as distinguished from therapeutic treatment.

You have a disorder of the eye which qualifies as an illness. You are having intraocular lens eye surgery to correct your vision, which is accepted as being an operation performed in order to correct or improve your condition. Your operation is not regarded as a cosmetic operation which beautifies or changes your appearance.

Therefore you are entitled to include the costs of the intraocular lens eye surgery in your medical expenses tax offset calculation.

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