Edited version of private ruling

Authorisation Number: 1011748401635

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Ruling

Subject: Medical expenses tax offset

Question and answers:

Do the expenses that you have incurred in visiting an exercise physiologist and receiving a monitored exercise program qualify as a medical expense, for the purposes of the medical expense tax offset?

No.

Do the expenses that you have incurred in purchasing thera-band exercise bands, weight jacket/vest, inflatable gym ball and physiotherapist exercise ball qualify as a medical expense for the purposes of the medical tax offset?

No.

Do the expenses that you have incurred in visiting a registered naturopath qualify as a medical expense for the purposes of the medical expense tax offset?

No.

Do the expenses that you have incurred in having tests performed by a pathology firm, qualify as a medical expense for the purpose of the medical expense tax offset?

Yes.

Do the expenses that you have incurred in purchasing vitamins qualify as a medical expense for the purposes of the medical expense tax offset?

No.

Do the expenses that you have incurred in purchasing other vitamins qualify as a medical expense for the purposes of the medical expense tax offset?

Yes.

This ruling applies for the following period

Year ended 30 June 2011

The scheme commenced on

1 July 2010

Relevant facts

You are an Australia resident for income tax purposes.

You were diagnosed with an illness.

In order to treat your illness you have under taken the following course of treatments and programs.

You visit an exercise physiologist for physical assessment and subsequent monitored exercise program. You were not referred to the exercise physiologist by a legally qualified medical practitioner, however a legally qualified medical practitioner overseas the treatments and exercise program prescribed by the exercise physiologist.

You have incurred the following expenses in relation to this program;

Ongoing fees to visit an exercise physiologist for physical assessment and monitored exercise program.

Payments for the following medical aid and equipment which you were advised to purchase by the exercise physiologist for daily home exercise program:

· thera-Band exercise bands

· weight jacket/vest

· inflatable gym ball

· physiotherapist exercise ball

You visit a registered naturopath. The naturopath has advised you to take various vitamins and supplements. You were not referred to the registered naturopath by a legally qualified medical practitioner, and the program is not overseen by a legally qualified medical practitioner.

You have incurred the following expense in relation to this program:

· ongoing fees to visit the naturopath

· vitamins

· payments for pathology tests arranged by the naturopath and paid to a pathology firm for the services rendered by a legally qualified medical practitioner

The vitamins were purchased from your naturopath.

A legally qualified medical practitioner advised you to take other vitamins and minerals. Although there is no prescription, a legally qualified medical practitioner overseas the use of the vitamins and minerals.

You have incurred expenses in relation to other vitamins. These items were purchased from a chemist

The following expenses were reimbursed through your health fund.

· Naturopath

· Exercise program

 You have incurred expenses that will exceed $2,000, and you have maintained written evidence for the various expenses and reimbursements.

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 159P

Reasons for decision

A medical expense tax offset is available to a taxpayer under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where the taxpayer pays medical expenses for themselves or a dependant who is an Australian resident. 

The medical expenses tax offset is only available if the amount of medical expenses (reduced by any entitlement to reimbursement from a health fund or government authority) exceeds the threshold amount in an income year. For the 2010-11 income year the threshold is $2,000. The tax offset is 20% of the amount by which the net medical expenses exceed $2,000.  

To qualify for the medical expense tax offset, the amount paid by the taxpayer must come within the definition of medical expenses in subsection 159P(4) of ITAA 1936.

Fees to visit an exercise physiologist for physical assessment and monitored exercise program

Under subsection 159P(4) of the ITAA 1936, the definition of medical expenses includes payments made for therapeutic treatment administered by direction of a legally qualified medical practitioner.

For treatment to be regarded as being administered by direction of a legally qualified medical practitioner, the treatment needs to be advised, prescribed or ordered by 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. 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, you have incurred ongoing fees in visiting an exercise physiologist. Although a legally qualified medical practitioner overseas the treatments and programs provided by the exercise physiologist, you were not advised, prescribed or ordered by a legally qualified medical practitioner to undertake this form of treatment.

Accordingly, the expenses incurred in visiting an exercise physiologist and the monitored exercise program do not qualify as a medical expense for the purposes of a medical expense tax offset, under section 159P of the ITAA 1936

Thera-Band exercise bands, Weight jacket/vest, inflatable gym ball and exercise ball

 Under subsection 159P(4) of the ITAA 1936, the definition of medical expenses includes payments in respect of medical or surgical appliances which have been prescribed by a legally qualified medical practitioner.

Tax Ruling TR 93/34 Income tax: medical expense rebate - meaning of medical or surgical appliance provides the Commissioner's view on what constitutes a medical or surgical appliance and provides that:

A medical or surgical appliance is an instrument, apparatus or device which is manufactured as, distributed as or generally recognised to be an aid to the function or capacity of a person with a disability or illness.

An item is an aid to the function or capacity of a person if it helps the person to perform activities of daily living.

Generally, a household or commercial appliance is not a medical or surgical appliance.

The character of the item rather than the purpose for which the item is prescribed or used determines whether the item is a medical or surgical

It should be noted that the cost of a medical or surgical appliance will only be eligible for a medical expenses tax offset if the appliance was prescribed by a registered medical practitioner.

In your case, you purchased thera-band exercise bands, weight jacket/vest, an inflatable gym ball and an exercise ball. These items were not prescribed by a legally qualified medical practitioner and were not specifically manufactured as an aid for those with a disability or illness.

Accordingly, the expenses incurred in purchasing these items do not qualify as a medical expense for the purposes of a medical expense tax offset, under section 159P of the ITAA 1936.

Fees to visit a registered naturopath

As previously mentioned in this ruling, under subsection 159P(4) of the ITAA 1936, the definition of medical expenses includes payments made for therapeutic treatment administered by direction of a legally qualified medical practitioner.

For treatment to be regarded as being administered by direction of a legally qualified medical practitioner, the treatment needs to be advised, prescribed or ordered by 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. 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, a legally qualified medical practitioner does not oversee the treatments and programs provided by the naturopath and you were not advised, prescribed or ordered by a legally qualified medical practitioner to undertake this form of treatment.

Accordingly, the expenses incurred in visiting a naturopath do not qualify as a medical expense for the purposes of a medical expense tax offset under section 159P of the ITAA 1936.

Tests performed by a pathology laboratory

Subsection 159P(4) of the ITAA 1936 defines medical expenses to include payments to a legally qualified medical practitioner in respect of an illness or operation. 

In your case, you have incurred expenses for pathology tests arranged by your naturopath and paid to a pathology laboratory. The payments you have made to a pathology laboratory were for the services rendered by a legally qualified medical practitioner.

Accordingly, the payments made to the a pathology laboratory do qualify as a medical expense for the purpose of a medical expense tax offset, under section subsection 159P(4) of the ITAA 1936.

Purchase of vitamins

Medical expenses are defined in subsection 159P(4) of the ITAA 1936 to include payments to chemist in respect of an illness or operation.

If medication is purchased from a chemist and is used in the treatment of an illness, the expenses that are incurred qualify as medical expenses for the purpose of calculating your medical expenses tax offset, under section 159P of the ITAA 1936.

In your case, you have incurred expenses in purchasing vitamins from your naturopath.

Accordingly, as the expenses incurred in purchasing vitamins were not paid to a chemist, they do not qualify as a medical expense for the purposes of a medical expense tax offset, under section 159P of the ITAA 1936.

Purchase of other vitamins

As previously mentioned in this ruling, medical expenses are defined in subsection 159P(4) of the ITAA 1936 to include payments made to a chemist in respect of an illness or operation.

If medication is purchased from a chemist and is used in the treatment of an illness, the expenses that are incurred qualify as a medical expense for the purpose of calculating your medical expenses tax offset under section 159P of the ITAA 1936.

In your case, you have incurred expenses in purchasing other vitamins. These items were purchased from a chemist.

Accordingly, as the expenses incurred in purchasing other vitamins were paid to a chemist and are in respect of an illness do qualify as a medical expense for the purposes of a medical expense tax offset, under section 159P of the ITAA 1936.