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Ruling

Subject: Medical expenses tax offset

Question

Can you include the cost of treatments provided by your chiropractor when calculating the 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 visited a practitioner at a chiropractic clinic.

The expenses incurred in visiting the clinic were in respect of an illness or operation.

Your practitioner appears on the Register of Practitioners of the Australian Health Practitioner Regulation Agency as a chiropractor.

Your practitioner at the chiropractic clinic does not have a medical degree.

You were not referred to this particular chiropractor by your doctor for a specific treatment.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 159P(1)

Income Tax Assessment Act 1936 Subsection 159P(3A)

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

Under subsection 159P(3A) of the ITAA 1936 a tax offset is available to a resident taxpayer whose net medical expenses paid in the year of income ended 30 June 2011 exceed $2,000. Net medical expenses are the medical expenses a taxpayer has paid less any refunds they received, or could have received, from Medicare or a private health fund. A taxpayer may claim a tax offset equal to 20% of the net medical expenses paid in the year of income in excess of $2,000.

The term medical expenses is defined in subsection 159P(4) of the ITAA 1936 and includes payments:

· to a legally qualified medical practitioner in respect of an illness or operation; or

· for therapeutic treatment administered by direction of a legally qualified medical practitioner.

Payments to a legally qualified medical practitioner

In Case 9/2005 2005 ATC 193, the Administrative Appeals Tribunal held that to be a 'legally qualified medical practitioner', the practitioner must be qualified under relevant legislation to practice medicine.

In Case U20 87 ATC 183, the Administrative Appeals Tribunal held that a chiropractor was not a 'legally qualified medical practitioner' as they were not qualified in terms of the requirements of the Medical Act in the relevant State. The Medical Act of Queensland defines a medical practitioner as a person registered as a medical practitioner and whose name remains upon the Register of Medical Practitioners, Queensland. The Medical Board appointed under that Act is required to maintain a register of medical practitioners.

The Australian Health Practitioner Regulation Agency now keeps a list of all registered health practitioners on its website including; medical practitioners, chiropractors and dentists.

In your case, as your chiropractor is registered as a chiropractor and not as a medical practitioner, the payments made to your chiropractor would not be considered payments to a 'legally qualified medical practitioner'.

Payments for therapeutic treatment

As stated above the definition of medical expenses also includes payments, 'for therapeutic treatment administered by direction of a legally qualified medical practitioner '.

It was held in Case A53 69 ATC 313; 15 CTBR (NS) Case 30 that the mere suggestion or recommendation by a medical practitioner that the patient undergoes therapeutic treatment is not sufficient for the payment to qualify as medical expenses. The patient would have to be referred by a medical practitioner to a particular person for specific treatment.

Therapeutic treatment involves the exercise of professional skill in the medical field in a way which normally involves the person administering the treatment using drugs or physical or mental processes of one kind or another for the purpose of curing or managing disease (Case R95 84 ATC 633; 27 CTBR (NS) Case 148).

Furthermore, therapeutic treatment as a concept is concerned with healing or curing, rather than preventing the need for therapy (18 TBRD Case T67; 14 CTBR (NS) Case 31). Although the treatment must be administered by direction of a legally qualified medical practitioner, the treatment need not be administered by such a practitioner.

Treatments by podiatrists, chiropractors, physiotherapists and speech pathologists are generally considered to be therapeutic in nature.

In your case, you incurred expenses in relation to visits to a chiropractor in respect of an illness or operation. However, you were not referred to your chiropractor by a medical practitioner for a specific treatment.

As the therapeutic treatment was not administered by direction of a legally qualified medical practitioner the payments made to your chiropractor would not be considered medical expenses as defined under subsection 159P(4) of the ITAA 1936.