ATO Interpretative Decision
ATO ID 2001/626 (Withdrawn)
Income Tax
Medical expenses tax offset - expenses incurred in providing training for therapistsFOI status: may be released
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This ATO ID is withdrawn as the interpretative issue is covered by ATO ID 2001/243.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is the taxpayer entitled to a medical expenses tax offset under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) for payments made to provide training to therapists so they can administer a specific type of therapy?
Decision
No. The taxpayer is not entitled to a medical expenses tax offset under section 159P of the ITAA 1936 for payments made to provide training to therapists so they can administer a specific type of therapy, as they are preliminary expenses which do not qualify as medical expenses.
Facts
The taxpayer' dependant has a medical condition that requires therapy.
A specific type of therapy is available for people with this condition. This therapy would qualify as 'therapeutic treatment' under subsection 159P(4) of the ITAA 1936.
Those people who will be administering the therapy have been provided training to give them the necessary skills needed to administer this therapy.
The taxpayer paid the cost of providing this training.
Reasons for Decision
Subsection 159P(3A) of the ITAA 1936 provides that a tax offset is allowable to a taxpayer whose net medical expenses in the year of income exceed $1250.
The medical expenses must be paid by the taxpayer in respect of themselves or their dependant.
Paragraph (d) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 includes payments for therapeutic treatment administered by direction of a legally qualified medical practitioner.
In Case R95 84 ATC 633; (1984) 27 CBTR (NS) Case 148, the Administrative Appeals Tribunal found that 'therapeutic treatment' necessitated the exercise of professional skill in the medical field in a way which normally involved the person administering the treatment using drugs or physical or mental processes for the purpose of curing or managing the disease or disorder.
The expenses incurred by the taxpayer are not payments for therapeutic treatment. They are more in the nature of preliminary expenses incurred to enable the future therapists to learn the necessary skills which will allow them, at a later stage, to administer the treatment.
The training expenses are considered to be preliminary expenses that are incurred before the therapeutic treatment is provided and are not medical expenses under subsection 159P(4) of the ITAA 1936. The taxpayer is not entitled to a medical expenses tax offset under section 159P of the ITAA 1936.
Date of decision: 30 October 2001Year of income: Year ended 30 June 2001
Legislative References:
Income Tax Assessment Act 1936
section 159P
subsection 159P(4)
paragraph 159(4)(d)
Case References:
Case R95
84 ATC 633
(1984) 27 CBTR (NS) 1154 Related ATO Interpretative Decisions
ATO ID 2001/182
ATO ID 2001/131
Keywords
Medical expenses
Medical expenses rebates
Alternative health expenses
Rebates
ISSN: 1445-2782
| Date: | Version: | |
| 30 October 2001 | Original statement | |
| You are here | 16 April 2010 | Archived |