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Edited version of private ruling
Authorisation Number: 1011662510731
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Ruling
Subject: Medical expenses tax offset
Question
Are fees in relation to an aged care package eligible as a medical expense for the purposes of the medical expenses tax offset?
Answer: Yes.
This ruling applies for the following periods:
Year ended 30 June 2010
The scheme commences on:
1 July 2009
Relevant facts and circumstances
You are legally blind and have a number of medical conditions in addition to mobility problems.
You received an aged care assessment in 2009 providing you with the eligibility to receive the following:
· low level residential care (permanent),
· high level residential respite care, and
· community care.
You are currently paying fees to an approved provider for an aged care package.
You require daily medical assistance which are required due to your medical condition. You receive this daily assistance under the package as well as weekly assistance with house cleaning, which is required as you are legally blind.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Income Tax Assessment Act 1936 Subsection 159P(4)
Reasons for decision
Section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) allows a tax offset for certain net medical expenses that a taxpayer pays during a year of income.
Paragraph (h) of the definition of 'medical expenses' in subsection 159P(4) of the ITAA 1936 includes payments as remuneration of a person for services rendered by him as an attendant of a person who is blind or permanently confined to a bed or an invalid chair. These services would be to assist the blind or invalid person with their personal care such as bathing and washing, dressing etc. Payments for services that are mainly of a domestic nature fall outside the scope of paragraph (h) of the definition.
You receive daily medical assistance and weekly house cleaning under an aged care package. Although house cleaning can be seen to be of a domestic nature this occurs only weekly and the necessity for this service arose from your disability. You receive on a daily basis the assistance for the provision of medical and personal care services.
It can be seen that the services provided are mainly for medical and personal care and for tasks that you are unable to perform as a result of your disability. As such the cost of the aged care package qualifies as a medical expense for the purpose of the medical expenses tax offset under section 159P of the ITAA 1936.