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Edited version of private ruling
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Ruling
Subject: Medical expenses tax offset
Question
Do the cost of a stair lift, fold up mobility scooter and specialised machine qualify as medical expenses for the purpose of calculating a medical expenses tax offset?
Answer
Yes.
This ruling applies for the following period
Year ended 30 June 2009
Year ended 30 June 2010
Year ended 30 June 2011
The scheme commenced on
1 July 2008
Relevant facts
You have been diagnosed with a degenerative illness.
As the result of recommendations from doctors and other health professionals, you have purchased a stair lift, a fold up mobility scooter and a specialised machine.
The specialised machine assists you to maintain muscle and joints at a maximum level of functioning, maintaining muscle and joint range, decreasing muscle stiffness and helping maintain muscle strength.
All of these items are manufactured, distributed and generally recognised as an aid to the function or capacity of a person with a disability or an illness.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Reasons for decision
Under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) a tax offset is available to a resident taxpayer whose net medical expenses paid in the year of income exceed the relevant threshold.
Net medical expenses are the medical expenses a taxpayer has paid less any refunds they received, or could have received, from Medicare or a private health fund.
Paragraph (f) of the definition of 'medical expenses' in subsection 159P(4) of the ITAA 1936 includes payments in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner.
Taxation Ruling TR 93/34 explains the meaning of a 'medical or surgical appliance' as being an instrument, apparatus or device which is manufactured, distributed or generally recognised as an aid to the function or capacity of a person with a disability or an illness.
Taxation Ruling TR 93/34 also provides that generally a household or commercial appliance is not a 'medical or surgical appliance' and that we need to look at the character of the appliance, not the purpose for which it is prescribed or used.
In Case D37 72 ATC 210; Case 7 (1972) 18 CTBR (NS) 33, the taxpayer installed a chair lift to enable his paralysed wife to move from floor to floor in their two storey house. The Board of Review held that the lift was a medical or surgical appliance, finding that:
... it can be said that the lift was specifically designed to replace or alleviate an absent or impaired bodily function or medical defect and the use of which, in the commercial sense, is limited in normal circumstances to such replacement or alleviation...In appearance and function the chair lift in the instant case may be equated to an invalid chair which is normally designed to enable the patient to travel in a horizontal plane. Here the chair was specifically designed for the vertical...
The stair lift, fold up mobility scooter and specialised machine are medical appliances as they have been manufactured as, and are generally recognised as, aids to those people who have a mobility impairment. Therefore, you are entitled to include the cost of these items in a calculation for a medical expenses tax offset.