Case Q21

Judges: MB Hogan Ch
P Gerber M

GW Beck M

Court:
No. 3 Board of Review

Judgment date: 31 March 1983.

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Dr. G.W. Beck (Member)

This taxpayer claimed $304 of rebatable medical expenditure in 1981 tax year and the Commissioner rejected his claim and subsequent objection. The amount represented the cost of five cans per week of a soy-based infant formula which was consumed by his infant daughter who had an extreme allergy to cows' milk. The formula was bought from chemists.

2. The claim falls for consideration under sec. 159P, which section includes a definition of ``medical expenses''. These expenses include payments to a legally qualified chemist ``in respect of an illness'' and payments ``for therapeutic treatment administered by direction of a legally qualified medical practitioner''. The use of a soy-based alternative to cows' milk was directed by medical allergists, and until the child was two years old the alternative was available at reduced cost on prescription. In the year in question the infant was over four years of age and although the taxpayer said he thought the product was available from pharmacists only on prescription this was clearly not correct. The taxpayer reiterated to the Board the basis of his claim which he had previously set out in a letter to the Commissioner dated 22 January 1982:

``I am claiming that [the soy-based alternative] should be an allowable deduction because it is no different to medicines, tablets, creams or the like in that the need to have it is caused by a MEDICAL CONDITION (she doesn't drink it just because she likes it).''

3. It must, I think, be conceded that the child had a medical condition, i.e. an illness, in the sense that she suffered an extreme reaction after consuming cows' milk which must be regarded as a normal food for

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human infants in this country. The reaction ceased when consumption of cows' milk ceased and it cannot be said that the soy-based alternative was administered for therapeutic reasons. Clearly, the soy-based alternative was prescribed to counter nutritional deficiencies in the child's diet arising from her inability to consume cows' milk and was not prescribed to counter the eczema caused by the allergy. I am unable to accept that the soy milk was akin to a medicine; it did not clear up the allergy rash or prevent it, it was simply a food.

4. Although the payments were not for treatment that could be described as ``therapeutic'', medical expenses are also defined in the section as payments to a chemist ``in respect of an illness'' and this seems to be casting the net widely. I have considered the dictionary meanings of ``respect'' in the phrase ``in respect of'' and found them to be not very illuminating. However, I have concluded that in phrases such as ``in respect of'' or ``with respect to'' the noun governed by the second preposition must be looked to as the causative word. In this case it is the noun ``illness'' in the definition in sec. 159P(4). The payment must be caused by the illness; it is not enough that a taxpayer has an illness and he chooses to spend on something that will make the illness more bearable or which will control factors arising out of the illness. Extending the meaning in that way would embrace payments such as for a hot-water bottle bought at the chemist when a taxpayer suffers a winter chill. The question I therefore frame as the test of the rebatable expenditure is: Was it caused by the illness itself? And the answer in this case has to be negative. The illness caused the taxpayer to withdraw cows' milk. Once this was done there was no longer illness, but there would have been a dietary deficiency unless an alternative food was found. The soy-based formula was that alternative food.

5. I confirm the assessment.

Claim allowed