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Ruling
Subject: Medical Expenses Tax Offset
Question
Are you entitled to include expenses for therapeutic treatments and medications you received at a health retreat when calculating your medical expenses tax offset?
Answer
No
This ruling applies for the following period
Year ended 30 June 2012
The scheme commences on
1 July 2011
Relevant facts and circumstances
You have suffered from an illness for many years.
Your doctor provided a referral when recommending you to a health retreat as part of your therapeutic treatment for your illness.
Your doctor had no input to the treatment you received and no reports were provided on your progress or for ongoing treatment by the health retreat to your doctor.
You have paid for the following expenses:
o Medical services
o Naturopathic consultation
o Fever bath/sheet treatment
o Massage
o Medication and vitamins prescribed by the naturopath
You will require ongoing consultations, treatment, medications and prescribed vitamins.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
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.
Medical expenses are defined in subsection 159P(4) of the ITAA 1936. Paragraph (d) of the definition of medical expenses includes payments for therapeutic treatment administered by direction of a legally qualified medical practitioner.
In order to qualify for the rebate such payments must meet the following conditions:
· they are for therapeutic treatment; and
· the therapeutic treatment is administered by the direction of a legally qualified medical practitioner.
Therapeutic treatment not formally prescribed by a doctor but rather undertaken on the basis of a mere suggestion or recommendation by a doctor to the patient is not enough for the treatment to qualify. The patient must be referred to a particular person for a specific treatment.
In Case R95 84 ATC 633; 27 CTBR (NS) Case 148, the Administrative Appeals Tribunal found that therapeutic treatment necessitated the exercise of professional skill in the medical field. This would normally involve the person administering the treatment using chemical agents or drugs or some physical and mental process which are directed towards the cure or management of a disease or aliment. Therefore, therapeutic treatment is concerned with healing or curing, rather than preventing the need for therapy.
It was held in Case A53 69 ATC 313, 15 CTBR (NS) Case 30 that therapeutic treatment is administered by direction of a legally qualified medical practitioner when the treatment is undergone as part of the medical practitioner's care of the patient. Treatment may be administered by the direction of the medical practitioner when the patient is referred by the practitioner to a particular specialist for specific treatment.
In your case, you were referred by your legally qualified medical practitioner to a health retreat as part of your therapeutic treatment for your illness. Your doctor had no input to the treatment you received, no progress report was provided to your doctor and there is no evidence of any ongoing treatment plan between the health resort and your doctor.
You paid the health retreat for medical services, naturopathic consultations, massages and medications and vitamins prescribed by a naturopath. You were not referred to a particular specialist for specific treatment and the treatment you received was not administered by the direction of a qualified medical practitioner.
Therefore, these costs are not considered to be eligible medical expenses as defined in subsection 159P(4) of the ITAA 1936.