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Edited version of private ruling
Authorisation Number: 1011698063027
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Ruling
Subject: Medical expenses tax offset
Question:
Do the expenses you incur for Applied Behaviour Analysis (ABA) therapy qualify as medical expenses for the purposes of the medical expenses tax offset?
Answer: Yes
This ruling applies for the following periods
Year ending 30 June 2011
Year ending 30 June 2012
Year ending 30 June 2013
The scheme commenced on
1 January 2011
Relevant facts
Your children were diagnosed with autism in December 2009. They were referred to an Autism authority who compiled the package of Government assistance and provided a program which included ABA therapy. There was only one ABA therapy provider in your geographic region.
They have been undergoing treatment since 2010. Their recommending paediatrician continues to see them on a regular basis and agrees that the ABA therapy is working.
The cost of the therapy does not qualify for a Medicare or Private health insurance benefit.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Reasons for decision
Subsection 159P(3A) of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a rebate is allowable to a taxpayer whose net medical expenses in the year of income exceed $1500.
The expenses must be paid by a resident taxpayer in respect of themselves or their resident dependant. Your children are resident dependants in accordance with subsection 159P(4) of the ITAA 1936.
Medical expenses are defined in subsection 159P(4) of the ITAA 1936.
Paragraph (d) of the definition includes payments 'for therapeutic treatment administered by direction of a legally qualified medical practitioner'.
In order to qualify for the rebate such payments must meet the following conditions;
· they are for therapeutic treatment; and
· the therapeutic treatment is administered by the direction of a legally qualified medical practitioner.
The general concept of therapeutic treatment is healing or curing rather than preventing the need for therapy (Case S2, 85 ATC 102; 17 TBRD Case S8 ).
In Case R95 84 ATC 633; Case 148 27 CTBR (NS) 1154, the Administrative Appeals Tribunal found that 'therapeutic treatment' necessitated the exercise of professional skill in the medical field. This would normally involve the person administering the treatment using chemical agents or drugs or some physical and mental processes which are directed towards the cure or management of a disease or ailment.
The Commissioner accepts that the ABA therapy is therapeutic treatment for the purposes of subsection 159P(4) of the ITAA 1936.
The therapeutic treatment must be administered by direction of a legally qualified medical practitioner.
A mere suggestion or recommendation by a doctor to a patient that the patient undergo therapeutic treatment is not enough for the associated expenses to qualify as medical expenses. The patient must be referred to a particular person for the therapeutic treatment (Case A53 69 ATC 313).
Your children were referred to an Autism authority by a legally qualified medical practitioner. The authority developed a program which included ABA therapy which was only available in one location in your area.
Accordingly, the expenses are considered to be therapeutic treatment administered by direction of a legally qualified medical practitioner. Therefore, the expenses you incur which relate directly to the administering of this program can be included in a calculation for a medical expenses tax offset under section 159P of the ITAA 1936. Such allowable expenses would be those for program supervision, administration and therapy fees.