Edited version of your private ruling

Authorisation Number: 1011950636062

This edited version of your ruling will be published in the public register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.

Ruling

Subject: Medical expenses tax offset

Question

Can you include the cost of home care 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 and your spouse are Australian residents and you live in your own home.

You are paying ongoing fees for services provided by a home care agency.

The services provided to you are the provision of three meals per day and assistance with bathing and some other minor tasks.

The carers are qualified as carers but are not registered nurses.

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 159P

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 under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where you have paid 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 relevant threshold. The tax offset is 20% of the amount by which the net medical expenses exceeds the 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). 

While this subsection requires that the payments must be paid to specific people, such as a legally qualified medical practitioner or a nurse, subsection 159P(5) of the ITAA 1936 extends that definition to include payments made to the employers of the relevant person in respect of the services or treatment they have provided.

However, where the payment is made to another entity, the only amount which will qualify for the tax offset is the amount that represents the remuneration (for example wages) of a person for their services as an attendant or carer.

The carers employed by the home care agency are not legally qualified medical practitioners and are not required to have nursing qualifications. In addition, the services they provide are more of a domestic nature rather than medical treatment in respect of an illness or operation. Therefore, any amounts paid in relation to this service do not qualify as medical expenses under paragraph (a) of the definition. 

Medical expenses are also 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, any amounts paid in relation to this service do not qualify as medical expenses under paragraph (h) of the definition.