Edited version of private ruling

Authorisation Number: 1011660999085

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Ruling

Subject: Medical expense Tax Offset

Can the costs of your home carer be included as a medical expense for the purpose of the medical expenses tax offset?

No.

This ruling applies for the following period:

Year ended 30 June 2010

The scheme commences on:

1 July 2009

Relevant facts and circumstances

Your spouse has been diagnosed with an illness and has been assessed for admission to an aged care facility.

You spouse's deteriorating condition requires 24 hour assistance with all activities of daily living including personal care.

You have decided that you and your spouse wish to remain in your home.

You have employed registered carers on a 24 hour basis seven days a week on rotational basis to care for your spouse at home.

Your spouse has been granted an extended aged care at home package however, there is a two year waiting list.

Your spouse's carers are not legally qualified as medical practitioners or nurses.

Your spouse is not blind and not permanently confined to a wheel chair.

Reasons for decision

Summary

The cost of your home carer cannot be included in your net medical expenses for the purposes of the medical expenses tax offset.

Detailed reasoning

A Medical expense tax offset is available under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where you paid for medical expenses in an income year for yourself or a dependant whilst an Australian resident. The medical expense tax offset is only available if the amount of medical expenses (reduced by any entitlement to reimbursement from a health fund or government authority) in an income year exceeds the threshold amount.

Medical expenses are defined in subsection 159P(4) of the ITAA 1936. Paragraph (a) includes payments to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation and, (h) as remuneration of a person for services rendered by them as an attendant of a person who is legally blind or permanently confined to a bed or an invalid chair.

In your case, your spouse suffers from an illness and has been assessed for admission to an aged care facility as they require full time care. You have employed registered carers as you and your spouse wish to live at home.

Your spouse's deteriorating condition requires constant 24 hour care. However, you do not satisfy the specific criteria defined in paragraph 159P(h) of the ITAA 1936 as your spouse is not blind or permanently confined to a bed or invalid chair. Also, your carers are not legally qualified medical practitioners or nurses. Therefore, the payments made to your carers do not meet the definition of medical expenses for the purpose of the medical expenses tax offset.

Therefore, you are not entitled to include the cost of carers in a calculation of a medical expense tax offset.