Edited version of private ruling

Authorisation Number: 1011767194531

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Ruling

Subject: Medical expenses tax offset - Home care

Question:

Do the fees for your home care qualify as medical expenses for the purposes of the medical expenses tax offset?

Answer: No

This ruling applies for the following periods

Year ending 30 June 2010

Year ending 30 June 2011

Year ending 30 June 2012

Year ending 30 June 2013

The scheme commenced on

1 July 2009

Relevant facts

You are an Australian resident for tax purposes, have been diagnosed with age related illness and have been assessed by the Aged Care Assessment Team as requiring high care at a residential aged care facility, as well as well as being approved for a home care package.

Your general practitioner and geriatrician have advised that home care is the best option at this stage.

Your home care is currently provided by an approved aged care provider.

The home carers are supervised by a registered nurse and have qualifications in aged care. Their duties include: overseeing showering, toileting, dressing, cleaning, clothes washing, supervising taking of medication, preparing and serving meals and ensuring the meals are eaten. The carers are not legally qualified medical practitioners.

You are incapacitated due to your cognitive decline, but are not blind, wheelchair bound or an invalid.

Reasons for decision

Subsection159P (3A) of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a tax offset is available to a taxpayer whose net medical expenses in the year of income exceed the relevant threshold for that year.

The medical expenses must be paid by a resident taxpayer in respect of themselves or a resident dependant. 

For the payments to an approved aged care provider to qualify as medical expenses for the purposes of the medical expenses tax offset, the expense must fall within the definition of 'medical expenses' as contained in subsection 159P(4) of the ITAA 1936.

In your case, you pay for carers from a registered care provider, to provide personal care to you at your home in addition to the care provided under a home care package. The carers are not legally qualified medical practitioners or nurses.

Expenditure on medically related expenses can only qualify for the tax offset if it falls within the definition of 'medical expenses' contained in subsection 159P(4) of the ITAA 1936. Paragraphs (a) to (g) of this subsection require each of the various services described to be provided by or at the direction of a legally qualified medical practitioner. As the carers in your case are not legally qualified medical practitioners and their services have not been provided under the direction of a legally qualified medical practitioner, the cost of these services cannot qualify for the medical expenses tax offset under any of these definitions.

Paragraph (h) of subsection 159P(4) of the ITAA 1936 includes payments to persons for services as attendants 'of a person who is blind or permanently confined to a bed or an invalid chair'.

The need to employ a person to provide assistance with your showering, toileting, dressing, cleaning, clothes washing, medication and meals is necessitated by your aged care needs. However, payments for attendant services in your case, since you are neither blind or permanently confined to a bed or an invalid chair would fall outside the scope of paragraph 159P(4)(h) of the ITAA 1936.

Therefore, payments to the approved aged care provider do not qualify as medical expenses for the purposes of the medical expenses tax offset.