Edited version of private ruling

Authorisation Number: 1011619502783

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Ruling

Subject: Medical expenses - therapeutic

Does the expense for school fees qualify as an eligible medical expense for the purposes of the medical expenses tax offset?

No.

This ruling applies for the following period

Year ending 30 June 2011

The scheme commenced on

1 July 2010

Relevant facts and circumstances

You are an Australian resident.

You have children with autism who have special education needs.

You have received advice from your doctor that your children cannot attend a main stream school and must attend a school that caters for special needs children with autism.

You are involved with a support group for autism.

Your support group has recommended you make enquiries about your children's future education.

The school has a class specifically made up of children who are all autistic.

There are several teachers supervising this class of autistic children who are all specialised in special needs and autistic children.

The class consists of four year old autistic students through to nine year old autistic students.

You have made several enquiries to schools within your area and there are no other schools that cater specifically for autistic students.

You have ongoing meetings with your doctor to converse on the progress of your autistic children.

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 159P

Income Tax Assessment Act 1936 Subsection 159P(4).

Reasons for decision

While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.

Summary

The cost of school fees does not fall within the definition of medical expenses and cannot be included in calculating your entitlement to a medical expenses tax offset.

Detailed reasoning

A medical expenses tax offset is available to a taxpayer under subsection 159P(1) 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, to the extent that they are not reimbursed, or are eligible to be reimbursed, from a government or public authority or a society, association or fund.

The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed the relevant threshold for the income year.

Medical expenses are also defined in subsection 159P(4) of the ITAA 1936 as including therapeutic treatment administered by direction of a legally qualified medical practitioner.

Therapeutic treatment as a concept is concerned with healing or curing, rather than preventing the need for therapy (Case T67 (1968) 18 TRBD 346; (1967) 14 CTBR (NS) Case 31. Therapeutic treatment involves the exercise of professional skill in the medical field in a way which normally involves the person administering the treatment using drugs or physical or mental processes of one kind or another for the purpose of curing or managing the disease or ailment (Case R95 84 ATC 633; 27 CTBR (NS) Case 148).

In your case, the children attending a special school for children suffering from autism does not involve any healing or curing, nor is it treatment administered by a person exercising skill in the medical field. The special school is for educational purposes and is not considered to be therapeutic treatment.

Therefore, the expenses that you will incur for the children's school fees do not qualify as a medical expense for the purposes of the medical expenses tax offset under section 159P of the ITAA 1936.