ATO Interpretative Decision
ATO ID 2001/766 (Withdrawn)
Personal tax
Medical expenses tax offset - 'rebatable amount'FOI status: may be released
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This ATO ID is withdrawn as it is a simple restatement of the law and does not contain an interpretative decision.This document incorporates revisions made since original publication.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 required to reduce the amount claimed as a medical expense under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) by the full amount of a health fund payment where that payment is made by instalments payable in the current and a number of future income years?
Decision
Yes. The taxpayer is required to reduce the amount claimed as a medical expense under section 159P of the ITAA 1936 by the full amount of a health fund payment where that payment is made by instalments payable in the current and a number of future income years.
Facts
The taxpayer suffers from a medical disorder.
The taxpayer incurred medical expenses as defined in subsection 159P(4) of the ITAA 1936 in obtaining treatment for their disorder.
The taxpayer is a member of a health insurance fund.
The taxpayer will be paid an amount by the health insurance fund in respect of those medical expenses incurred. That amount will be paid by instalments spread over the current and a number of future income years.
Reasons for Decision
Subsection 159P(3A) of the ITAA 1936 provides that a medical expenses tax offset is allowable to a taxpayer whose 'rebatable amount' in the year of income exceeds $1250.
Subsection 159P(1) of the ITAA 1936 provides that the 'rebatable amount' is the amount of the medical expenses less any amount which the taxpayer is entitled to be paid in respect of those medical expenses. The payment to be received includes amounts received from a health insurance fund.
For the purposes of subsection 159P(1) of the ITAA 1936 the taxpayer is still entitled to the full refund from the health insurance fund even where it is payable at a later date by instalments.
The taxpayer must therefore deduct the full amount of the payment they are entitled to receive from the health insurance fund in respect of the medical expenses incurred and use only the net amount for the purposes of calculating the medical expenses tax offset.
Date of decision: 7 November 2001
Legislative References:
Income Tax Assessment Act 1936
subsection 159P(1)
subsection 159P(4)
Keywords
Medical expenses
Medical expenses rebates
ISSN: 1445-2782
| Date: | Version: | |
| 7 November 2001 | Original statement | |
| You are here | 16 April 2010 | Archived |