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Edited version of private ruling
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Ruling
Subject: Medical expenses tax offset
Question
Can you include the cost of herbal medicine obtained from an acupuncturist in a calculation for a medical expenses tax offset?
Answer
No.
This ruling applies for the following period
Year ended 30 June 2011
The scheme commenced on
1 July 2010
Relevant facts
You are an Australian resident for tax purposes.
You suffered from a medical condition for most of your adult life.
Your specialist suggested a number of alternative strategies including acupuncture.
You began an acupuncture and herbal medicine routine.
Because of the success of the alternative treatment, your specialist suggested that you continue with the medicine they prescribed as well as the acupuncture and herbal medicine.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Reasons for decision
A medical expenses tax offset is available under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where you pay medical expenses in an income year for yourself and/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 annual threshold. The tax offset is 20% of the amount by which the net medical expenses exceeds the annual threshold.
Medical expenses are defined in 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 (paragraph (a) of the definition).
Paragraph 159P(4)(d) of the ITAA 1936 includes in the definition of medical expense, a payment, 'for therapeutic treatment administered by direction of a legally qualified medical practitioner.
It was held in Case A53 69 ATC 313; (1969) 15 CTBR (NS) Case 30 that the mere suggestion or recommendation by a medical practitioner that the patient undergoes therapeutic treatment is not sufficient for the payment to qualify as medical expenses. The patient would have to be referred by a medical practitioner to a particular person for specific treatment.
In your case, you are undertaking treatment by an acupuncturist and purchasing medication from them. Acupuncture is considered to be therapeutic treatment and the acupuncturist, while qualified in their particular field, is not considered to be a legally qualified medical practitioner. You were not referred to a particular person for specific treatment.
The medications are not purchased from a legally qualified medical practitioner, nurse or chemist, or a public or private hospital.
Therefore, treatment by an acupuncturist and herbal medications purchased from them cannot be included in your calculation for a medical expenses tax offset.