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Edited version of private ruling
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Ruling
Subject: Medical expenses tax offset
Question
Do the fees you paid for a program to assist your children's medical condition qualify as medical expenses for the purposes of the medical expenses tax offset?
Answer
No.
This ruling applies for the following period
The year ended the 30 June 2010
The scheme commenced on
1 July 2009
Relevant facts
You have dependant children who have been diagnosed with a medical condition.
You enrolled your children into a particular program, after viewing an article on their program and its effects on children with certain medical conditions.
Your medical practitioner completed sections of the organisations medical consent form. Information contained in the medical consent form is used to develop the clients program and for reviewing their progress.
You medical practitioner did not provide you with a referral to the organisation.
There is no interaction between your medical practitioner and the organisation and no report on your children's progress is instigated by the organisation or your medical practitioner.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 159P(1)
Income Tax Assessment Act 1997 Section 159P(4)
Reasons for decision
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 $1,500 for the 2009-10 income year.
Paragraph (d) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 includes payments made for therapeutic treatment administered by direction of a legally qualified medical practitioner.
It was held in Case A53 69 ATC 313; 15 CTBR (NS) Case 30 that the mere suggestion or recommendation by a medical practitioner that the patient undergoes therapeutic treatment is not sufficient for the payment to qualify as medical expenses. The patient would have to be referred by a medical practitioner to a particular person for specific treatment.
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; (1984) 27 CTBR (NS) Case 148).
Although the treatment must be administered by direction of a legally qualified medical practitioner, the treatment need not be administered by such a practitioner.
In your case, the program was not recommended by your medical practitioner. They did not provide you with a referral to participate in the program nor have they closely monitored your children's progress and, the skills exercised in the program are not in the medical field. As such, your children's participation in the program is not part of a treatment administered under the instruction or guidance of a physician.
Therefore, the fees you have paid for the program do not qualify as eligible medical expenses under paragraph (d) of the definition in subsection 159P(4) of the ITAA 1936 and cannot be included when calculating the medical expenses tax offset.