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Edited version of private ruling
Authorisation Number: 1011804535601
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Ruling
Subject: tax offsets - medical expenses
Question and answer:
Are the costs associated with employing carers to care for you in your own home eligible for the medical expenses offset?
No.
This ruling applies for the following periods:
Year ended 30 June 2010
Year ended 30 June 2011
Year ended 30 June 2012
Year ended 30 June 2013
Year ended 30 June 2014
The scheme commenced on:
1 July 2009
Relevant facts
You require full-time care.
This care is carried out in your own home.
You employ carers to provide this care 24 hours a day 7 days a week.
Without this care in your own home you would be forced to enter an aged care facility.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Reasons for decision
Section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a tax offset is allowable to a taxpayer whose net medical expenses (that is, medical expenses less any amount paid or payable by Medicare or any other fund) in the year of income exceed a certain threshold.
The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed $1,500 for the income year.
The term medical expenses is defined in paragraph 159P(4) of the ITAA 1936. In your case, the most relevant sections of this definition are:
· paragraph 159P(4)(a) relating to payments made to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation, and
· paragraph 159(4)(h) relating to remuneration of a person for services rendered by him as an attendant of a person who is blind or permanently confined to a bed or an invalid chair.
In your case you employ full-time carers 24 hours a day 7 days a week. According to the documentation provided to us by your doctor you require 24 hour care.
You do not meet the requirements under paragraph 159P(4)(a)and 159(4)(h) as the carers you employ are not legally qualified nurses and you are neither blind nor permanently confined to a bed or invalid chair.
Therefore, the costs you have incurred in relation to the employment of full-time carers do not qualify as medical expenses under the definition in paragraph 159P(4)(h) of the ITAA 1936.
Future income years
Due to the possibility of change to the law, the possibility of changes in your circumstances, and the risk that a subsequently issued public ruling might override a private ruling the Commissioner has issued, the Commissioner cannot provide a private ruling for an extended future period. In your case the Commissioner has decided to issue a private ruling for the 2009-10 to 2013-14 income years. You can request a further ruling after this time if you are still unsure about this issue.