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Edited version of private ruling
Authorisation Number: 1011904670427
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Ruling
Subject - Medical expenses tax offset
Question 1
Is the portion of your invoice relating to the purchase and installation of a wheelchair lift in your home an eligible medical expense?
Answer
Yes.
Question 2
Is the portion of your invoice relating to the building alteration to your home an eligible medical expense?
Answer
No.
This ruling applies for the following period
Year ended 30 June 2011
The scheme commenced on
1 July 2010
Relevant facts
Your child is confined to a wheelchair and unable to access parts of your home without being physically carried.
Your paediatrician has prescribed the use of a wheelchair lift to assist with your child's mobility issues in the home.
The installation of the lift was organised by a government provider and cost of the work was subsidised under a government funded program.
The total cost of the work provided is broken up into the purchase and installation of the wheelchair lift and building alterations.
You were required to make a contribution towards the total cost of the work provided.
XYZ lift is the provider of the wheelchair lift. The wheelchair lift is specifically built and advertised as a lift for people with limited mobility.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Income Tax Assessment Act 1936 Subsection 159P(1)
Income Tax Assessment Act 1936 Subsection 159P(4)
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.
For the 2010-11 financial year the medical expenses tax offset is 20% of the amount by which the net medical expenses exceed $2,000. Please note that the threshold amount is subject to indexation and will change in future income years.
Subsection 159P(4) of the ITAA 1936 defines medical expenses which are eligible for the medical expenses tax offset. Paragraph (f) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 includes payments made in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner.
Taxation Ruling TR 93/34 explains the meaning of a 'medical or surgical appliance' as being an instrument, apparatus or device which is manufactured, distributed or generally recognised as an aid to the function or capacity of a person with a disability or an illness.
This definition looks to the character of the appliance, not the purpose for which it is prescribed or used. It is not sufficient that a medical practitioner prescribes an appliance for medical or surgical ends.
The wheelchair lift has been manufactured, is sold specially and is generally recognised as an aid to those people who have mobility impairment. Its character is to aid a mobility impaired person overcome obstacles such as staircases.
The purchase and use of the wheelchair lift was prescribed for your child by a legally qualified medical practitioner and your child uses it as an aid to their mobility within your home. The wheelchair lift meets the requirements of a 'medical or surgical appliance'.
The costs attributed to the building alterations done in conjunction with the installation of the wheelchair lift are separate and distinct from the purchase and installation costs. Building alterations are not considered to be medical or surgical appliances for the purposes of paragraph (f) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936.
Therefore, as the invoice you have paid represents the purchase and installation of the wheelchair lift plus the building alterations, you will need to apportion the invoice amount in respect of the medical and non-medical components of the invoice. Apportionment must be made on a fair and reasonable basis.