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Ruling

Subject: Medical expenses tax offset

Question 1

Are you entitled to include the amount you paid to purchase and install a chair lift for the purpose of the medical expenses tax offset in your 2011 income tax return?

Answer

Yes.

Question 2

Are you entitled to include the amount you paid in respect of your spouse to purchase and install support railings, a shower chair and over toilet aid for the purpose of the medical expenses tax offset in your 2011 income tax return?

Answer

Yes.

This ruling applies for the following period:

Year ended 30 June 2011

The scheme commences on:

1 July 2010

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

Your medical expenses for the year ended 30 June 2011 exceed $2,000.

You incurred medical expenses for yourself and your spouse during the year ended 30 June 2011.

You can substantiate all expenses.

You have had permanent physical disabilities,

You had several falls over a short period of time.

To reduce the risk of any further falls, you purchased a chair lift and had it installed on your staircase.

You incurred costs to purchase and install the chair lift.

You have a referral from you GP detailing the medical necessity of this chair lift.

Your spouse was completely immobile for a period of about X weeks.

Your spouse had daily medication, physiotherapy X times a day and occupational therapy X times a day to rebuild strength and mobility.

An Occupational Therapist came to your home to perform an inspection to determine what disability aids needed to be installed.

The aids were needed so your spouse could be in a safe environment that would meet restricted mobility needs.

The Occupational Therapist made the permanent installation of support railings in the shower recess and alongside the toilets conditions that needed to be met before your spouse could be discharged.

An over toilet aid and shower chair were also required.

All of these items were acquired and installed before your spouse returned home.

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 159P.

Reasons for decision

Under subsection 159P(3A) of the Income Tax Assessment Act 1936 (ITAA 1936), a medical expenses tax offset is available to a resident taxpayer whose net medical expenses in the year of income exceeds $2,000. The amount of the tax offset is 20% of the expenses that exceed $2,000.

In order to qualify for the tax offset, the medical expenses must be paid by a resident taxpayer in respect of himself, or a resident dependant. The amount expended must be reduced by any amount paid/reimbursed, or eligible to be reimbursed, from a government or public authority or a society, association or fund (whether incorporated or not), regardless of who receives or is entitled to receive the reimbursement.

Subsection 159P(4) of the ITAA 1936 defines medical expenses to include 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.

TR 93/34 also provides that generally, a household or commercial appliance is not a medical or surgical appliance and that we need to look at the character of the appliance, not the purpose for which it is proposed or used.

A chair lift is manufactured, sold specially and is generally recognised as an aid to those people who have impaired mobility. Its character is to aid a mobility impaired person overcome obstacles such as staircases. A chair lift meets the requirements of a medical or surgical appliance. Support railings in showers and beside toilets, shower chairs and over toilet aids are devices which are manufactured and distributed as aids to the function or capacity of a person with a disability or illness. Therefore, these items also meet the requirements of a medical or surgical appliance.

In your case, you have incurred medical expenses in respect of yourself and your spouse; therefore you qualify for the medical expenses tax offset. The purchase and use of the chair lift was recommended for you by a legally qualified medical practitioner and you use it as an aid to your mobility within your home. Support railings, a shower chair and an over toilet aid were recommended to your spouse by a legally qualified medical practitioner to assist her in coping with medical conditions. Accordingly, the cost of purchasing and installing theses items are considered to be medical or surgical appliances for the purpose of the medical expenses tax offset.