Edited version of private ruling

Authorisation Number: 1011745893035

This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fac sheet has more information.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.

Ruling

Subject: Medical Expenses

Question 1

Do the following costs qualify as medical expenses when calculating your medical expenses tax offset?

· Pool

· Bed

· Mattress

· Remote control for bed

· Custom mount

· Bathroom modifications, and

· Motor vehicle modifications

Answer

No.

Question 2

Do the following costs qualify as medical expenses when calculating your medical expenses tax offset?

· Mobile lifter

· Lever handle disabled

· Grab rails

· Bed rails

· Respite care

· Motor vehicle wheelchair access ramp, and

· Installation of a ceiling lifting hoist

Answer

Yes.

This ruling applies for the following periods:

Year ended 30 June 2005

Year ended 30 June 2006

Year ended 30 June 2008

Year ended 30 June 2009

The scheme commences on:

1 July 2004

Relevant facts and circumstances

Your dependant suffers from a physical disability and is confined to a wheelchair.

In the 2004-05 financial year you purchased a pool to assist with your dependant's abilities in performing activities of daily living and to provide a benefit to their future mobility.

In the 2005-06 financial year you purchased a bed, mattress and a mobile lifter to assist and improve your dependant's daily living and functioning requirements.

The mobile lifter is used to raise your dependant into and out of a bath chair, bed, pool and their wheelchair.

In the 2007-08 financial year you carried out modifications to your bathroom to assist your dependant's ability to bath and improve the ease of mobility throughout this area.

The costs associated with the bathroom modifications include:

· All demolitions including removal of tile off floor

· Shaping of floor to provide non-step shower

· Plumbing and electrical expenses

· New door through to bedroom

· Sheeting of walls

· Paint new doors and walls above the vinyl

· New change cupboard

· Vinyl safety floor

· New fixtures

· Basin Tribune wall

· Basin mixer imperial

· Lever handled disabled

· Shower mixer

· Grab rails

· Toilet suite.

In the 2008-09 financial year you purchased:

· bed rails to assist your dependant's ability to get in and out of bed

· a remote to adjust the head and height of the bed to assist your dependant to get in and out of bed

· a custom mount to hold and support a computer (talking device) on your dependant's wheelchair.

On two occasions in the 2008-09 financial year your dependant attended respite care at an approved aged care facility under the Aged Care Act 1997.

You have not been reimbursed any of the costs for your dependant's respite care.

In the 2008-09 financial year you carried out modifications to your motor vehicle to allow wheelchair access for your dependant.

The costs associated with the motor vehicle modifications include:

· Body modifications carried out to provide wheelchair access,

· Second row seating repositioned to allow transport of a single wheel chair between seats,

· Third row seating was replaced,

· Recess in vehicle floorpan to provide wheelchair access,

· Rear suspension system replaced,

· Aluminium access ramp fitted,

· Reinforced framing for anchorage of lap belt for wheelchair occupant, and

· Seat and child restraint anchorages reinstalled.

In the 2008-09 financial year you had expenses for the installation of a ceiling lifting hoist. The hoist runs on tracks from the bathroom to the bedroom, and its purpose is to assist your dependant to get in and out of a bath chair, bed and their wheelchair.

Your general practitioner has recommended all of the above specifically to assist with mobility, access and the daily living requirements of your dependant.

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 159P

Reasons for decision

Summary

The costs of the pool, bed, mattress, bed remote control, custom mount, and the modifications to the bathroom and motor vehicle are not eligible medical expenses.

However, the costs for the mobile lifter, lever handle disabled, grab rails, bed rails, respite care, motor vehicle wheelchair access ramp, and installation of the ceiling lifting hoist are all eligible medical expenses and can be included when calculating your medical expenses tax offset.

Detailed reasoning

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 income year.

Medical expenses are defined in subsection 159P(4) of the ITAA 1936 to include payments in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner (paragraph (f) of the definition).

Taxation Ruling TR 93/34 states that a medical or surgical appliance is an instrument, apparatus or device which is manufactured as, or distributed as, or generally recognised to be an aid to the function or capacity of a person with a disability or an illness.

For an item to be a medical or surgical appliance, it must assist or improve a person's abilities in performing activities of daily living when they in fact suffer from a disability. This test looks to the character of the appliance, not the purpose for which it is prescribed or used. It is not sufficient that a medical practitioner prescribes an appliance for medical or surgical ends.

Pool

Taxation Ruling TR 93/34 illustrates the Commissioner's view on what he considers to be medical or surgical appliances; paragraph 9 of this taxation ruling states that the Commissioner does not consider a swimming pool to be a medical or surgical appliance.

In Case 82 ATC 184 - the taxpayer's wife had contracted poliomyelitis which affected her legs and spine. To enable her to exercise the muscles affected by the disease, a hydrotherapy pool was installed in the grounds of their home. The pool was also used by the taxpayer who had hip trouble.

The taxpayer claimed that the cost of constructing the pool and its enclosure was rebatable as medical expenses since it was a payment in respect of a medical or surgical appliance within the meaning of section 159P.  The claim was disallowed as the pool and its enclosure did not qualify as a medical or surgical appliance.

Therefore, in your case although you have stated that the swimming pool provides a benefit in aiding your dependant perform activities of daily living, the costs of the swimming pool are not an eligible medical expense.

Bed, mattress and mobile lifter

You incurred expenditure on a specialised bed, mattress and mobile lifter purchased from a hospital. Your general practitioner recommended the specialised bed as it could be beneficial to your dependant's future mobility.

Paragraph 7 of Taxation Ruling TR 93/34 states that an item which merely has a therapeutic purpose, such as relieving, healing or preventing a medical condition, is not considered to be a medical or surgical appliance within the meaning of paragraph 159P(4)(f) of the ITAA 1936.

While it is acknowledged that the bed and mattress may aid the function of a person with a disability or illness, the items themselves retain their domestic function of being a place to sleep in a household setting. The character of the bed and mattress, in essence, remain pieces of household furniture and the costs of these items are not eligible medical expenses.

However; the purpose of the mobile lifter is to raise your dependant from their wheelchair into the bath, bed or pool. As the mobile lifter is specifically manufactured and distributed as an aid to the function or capacity of a person with a disability, this item can be included when calculating your medical expenses tax offset.

Bathroom modifications

You have incurred expenses for bathroom modifications that have been made to assist with your dependant's ability to bath and improve their ease of mobility throughout this area.

Although these bathroom modifications are required due to your dependant's medical condition, they have a general domestic or household purpose. Building alteration expenses are not payments for an instrument, apparatus or device recognised as an aid to the function or capacity of a disabled person.

Therefore, the modifications to your bathroom are not considered medical or surgical appliances for the purposes of paragraph (f) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936. Accordingly the costs you incurred in relation to the bathroom modifications are not eligible medical expenses.

However; you did incur some costs for fixtures that are manufactured and distributed as aids to the function or capacity of a person with a disability or illness. Due to the purpose of the lever handle disabled and the two grab rails, the costs of these items are considered to be medical expenses and can be included when calculating your medical expenses tax offset.

Bed rails

The bed rails were purchased from X medical supplies. This type of bed rail has been specifically manufactured and is generally recognised as an aid to the function and capacity of a person with a disability or illness. 

The bed rails satisfy the requirements of TR 93/34 as they improve your dependant's ability to perform activities of daily living, which is the task of getting in and out of their bed.

Therefore, the expenses that you incur in acquiring the bed rails are an allowable medical expense and can be included when calculating your medical expenses tax offset.

Remote for bed

You purchased a remote for your dependant's bed from X medical supplies. The purpose of this remote is to adjust the head and height of the bed.

As mentioned above, TR 93/34 states that in considering whether an item is a medical or surgical appliance, it is the character of the item which is determinative, not the purpose for which it is prescribed or used.

While it is acknowledged that the remote may aid the function of a person with a disability or illness, the bed, for which the remote is used, still retains its domestic function of being a place to sleep in a household setting.

Therefore, the remote for the bed, in essence, is simply an addition to a piece of household furniture and subsequently the costs of the remote are not an eligible medical expense.

Custom mount

The term medical expenses are defined in paragraph (a) of subsection 159P(4) of the ITAA 1936 to include payments to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital in respect of an illness or operation.

You purchased a custom mount for your dependant's wheelchair. The purpose of this mount is to hold and support a computer (talking device) to your dependant's wheel chair.

As the payments for the mount are not made to a person or organisation described in subsection 159P(4) of the ITAA 1936, the conditions to be able to claim this payment as a medical expense are not satisfied.

Also, as the custom mount is only a support for something that aids your dependant's ability in performing daily activities, it does not satisfy the requirements of TR 93/34 and is not considered to be a medical or surgical appliance.

Therefore, the costs of the custom mount that you have incurred are not an eligible medical expense.

Respite care

In Subsection 159P(4) of the ITAA 1936, it states that the term medical expenses includes payments to a public or private hospital in respect of an illness or operation.

Your dependant suffers from a physical disability, is confined to a wheelchair and has been assessed to have a high care rating requirement.

Your dependant attended an organisation, which is regarded as a hospital for the purposes of subsection 159P(4) of the ITAA 1936, on two occasions throughout the 2008-09 year of income.

You have not been reimbursed for any of the expenses associated with your dependants respite care.

Therefore; as your dependant's respite care satisfies the medical expenses requirements in Subsection 159P(4) of the ITAA 1936, the associated expenses can be included when calculating your medical expenses tax offset.

Motor vehicle modifications

You have incurred expenditure on converting your motor vehicle to allow your dependant to have wheelchair access. As previously stated, generally a household or commercial appliance is not a medical or surgical appliance and to determine if it is we need to look at the character of the appliance, not the purpose for which it is prescribed or used.

A motor vehicle modified or otherwise, is a means of private transport and it retains its character as a passenger vehicle. It is not an item which is specifically manufactured, distributed or generally recognised for use by a person with a disability or illness. It is necessary to consider the eligibility of the different components of the conversion to the motor vehicle.

In your case, the majority of the motor vehicle conversion costs are not considered to meet the criteria of eligible medical expenses. Although these modifications are necessary to allow your dependant to travel in the motor vehicle, they are not payments made in respect of a medical or surgical appliance. They are modifications to a motor vehicle; which, is not considered to be a medical or surgical appliance.

However, the motor vehicle wheelchair access ramp has been manufactured as an appliance which will enable a person, who is confined to a wheelchair, to gain access to a car. It assists your dependant's ability to perform one of the activities of daily living, which is, travelling in a passenger vehicle. The ramp has the character as an aid to the function or capacity of a person with a disability and is considered to be a medical appliance.

Therefore, the payment for the purchase and installation of the motor vehicle wheelchair access ramp is considered to be a medical or surgical appliance for the purposes of paragraph 159P(4)(f) of the ITAA 1936 and these expenses can be included in your calculation for a medical expense tax offset. However, the remaining costs of modifying the motor vehicle, are not eligible medical expenses.

Installation of a ceiling lifting hoist

TR 93/34 lists examples of articles which are considered to be medical or surgical appliances. Paragraph 9(i) of TR 93/34 lists lifts for conventional commercial or household use as not being a medical or surgical appliance.

In your case, the ceiling lifting hoist runs on tracks from the bedroom to the bathroom. The hoist is used to lift your dependant into and out of a bathroom chair, bed and their wheel chair.

The ceiling lifting hoist has been manufactured for a specific purpose and is generally recognised as an aid to those people who have mobility impairment. Its character is to aid a mobility impaired person overcome obstacles such as getting in and out of bed or the bath.

Accordingly, the costs that you have incurred for installing the ceiling lifting hoist are considered to be medical expenses and can be included when calculating your medical expenses tax offset.