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Edited version of private ruling
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Ruling
Subject: Medical expenses deductibility
Question
Are you entitled to a deduction for the cost of your hearing aids?
Answer
No
This ruling applies for the following period
Year ended 30 June 2011
The scheme commenced on
1 July 2011
Relevant facts
You run a small business and been diagnosed as profoundly deaf.
You were advised by an Audio Clinic to protect what hearing you had left, at all costs.
You have purchased a particular brand of hearing aids.
These hearing aids have allowed you to continue with your business and at the same time protect your hearing from further damage with inbuilt noise suppression.
You purchased these hearing aids in early 2011.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Summary
A deduction is not available for the expenditure incurred in purchasing your hearing aids, as the expenses are considered to be private in nature.
Detailed reasoning
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.
Taxation Ruling IT 2217 addresses income tax deductions for medical appliances. It refers to the decisions in Case Q17 83 ATC 141; Case 82 26 CTBR (NS) 715: Gilbert v.Federal Commissioner of Taxation 82 ATC 141; Taxation Case 96 25 CTBR (NS) 715 where it was found that the sole purpose of a wheelchair or hearing aid was to aid the taxpayer in overcoming a personal disability.
Although the taxpayer might be unable to earn assessable income without the aid of the relevant appliance, the outlay on the appliance was not incurred in gaining that assessable income but rather was incurred to help overcome an unfortunate disability suffered by the taxpayer.
In your case, you purchased hearing aids that will allow you to continue in your business. Whilst we acknowledge these hearing aids may also protect your ears from further damage because of their inbuilt noise suppression, this however does not alter the inherent character of the hearing aid being to overcome a physical disability.
The expenses are not considered to be incurred in gaining your assessable income, but rather incurred in overcoming a medical condition. Therefore, you are not entitled to claim a deduction for this expenditure as it is private in nature.