Edited version of private ruling

Authorisation Number: 1011839252908

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Ruling

Subject: medical expenses

Question

Can the amounts you have paid for the services of an agency and private carers be included as an eligible medical expense in the calculation of a medical expenses tax offset?

Answers

No.

This ruling applies for the following periods

Year ended 30 June 2010

Year ending 30 June 2011

Year ending 30 June 2012

Year ending 30 June 2013

Year ending 30 June 2014

The scheme commenced on

1 July 2009

Relevant facts

The arrangement that is the subject of the private ruling is described below. This description is based on the following documents. These documents form part of and are to be read with this description. The relevant documents are:

· the application for private ruling

· the documents attached to the private ruling application

· further written information received

· the documents attached to the further written information

You suffer from a medical condition.

You need assistance to undertake any daily functions.

You require a personal carer to support your daily activities and attending your medical appointments.

You are not legally blind or confined permanently to a bed or an invalid chair.

You can walk short distances on a walking frame.

The carers provided by the agency do not have nursing qualifications and are usually students.

You have engaged a private carer, whom you have located through your GP clinic. They have a Certificate III in Disabilities and have undertaken numerous other industry training courses such as behaviour management, risk assessment and OH&S.

The carers perform the a number of services for you:

You have provided a copy of an invoice from your private carer.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 159P(1)

Income Tax Assessment Act 1936 Subsection 159P(4)

Income Tax Assessment Act 1936 Subsection 159P(5)

Reasons for decision

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.

Medical expenses are defined in subsection 159P(4) of the ITAA 1936 to include payments made to a person providing services, as an attendant, of a person who is blind or permanently confined to a bed or an invalid chair (paragraph (h) of the definition).

In your case, you are not blind or permanently confined to a bed or invalid chair. Therefore, the payments you have made for the services of the agency and private carer do not qualify as medical expenses under paragraph (h) of the definition.

Agency and private carers

Paragraph (a) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 includes payments made to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital in respect of an illness or operation.

Subsection 159P(5) of the ITAA 1936 extends that definition to include employers (not being a public or private hospital) of a relevant person who is a legally qualified medical practitioner, nurse or chemist in respect of the provision of services or treatment, or the supply of goods, by the relevant person, shall be taken to be a payment made to the relevant person.

The term illness is not defined in the ITAA 1936 and therefore it is necessary to look at the ordinary meaning of the term. An illness includes a sickness, disease, or disorder of the body or the mind and involves a deviation from the normal healthy state.

In your case, you have been diagnosed with an illness. You currently live at home with your spouse and whilst they are at work or away, you require full time home care.

However, you do not satisfy the specific criteria defined in paragraph (a) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 as you have not made the payments to a public or private hospital and the agency staff and private carer are not legally qualified medical practitioners or nurses.

Therefore, you are not entitled to a medical expenses tax offset in respect of the payments made to the agency and private carer.

It should be noted that the legislation is very specific as to the circumstances under which a taxpayer is entitled to a medical expenses tax offset in respect of the cost of carers. The Commissioner does not have the discretion to allow a taxpayer who requires a carer for reasons other than those specified in the legislation to claim a medical expenses tax offset in respect of the costs of the carer.