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Ruling

Subject: Medical expenses tax offset

Question

Do expenses incurred on a compulsory association joining fee and postage qualify as 'medical expenses' for the purposes of calculating the medical expenses tax offset?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 2008

The scheme commences on:

1 July 2007

Relevant facts and circumstances

Your spouse has been diagnosed with a medical condition. As a result your spouse had to have a medical procedure.

You live in a rural location and had a medical appliance mailed to your spouse.

In order to have the appliance mailed to your spouse, your spouse had to pay a compulsory joining fee.

Your spouse also had to pay postage. Your spouse is not well enough to travel the extended distances to procure the appliance in person.

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 159P.

Reasons for decision

Summary

You are not entitled to include the cost of the joining fee or the postage in your calculation of the medical expenses tax offset.

Detailed reasoning

Section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a tax offset is allowable to a taxpayer whose net medical expenses (that is, medical expenses less any amount paid or payable by Medicare or a private health fund) in the year of income exceed a certain threshold.

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

(a)  to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation;

(b)  to a legally qualified dentist for dental services or treatment or the supply, alteration or repair of artificial teeth;

(c)  to a person registered under a law of a State or Territory as a dental mechanic in respect of charges lawfully made by that person for the supply, alteration or repair of artificial teeth;

(d)  for therapeutic treatment administered by direction of a legally qualified medical practitioner;

(e)  in respect of an artificial limb (or part of a limb), artificial eye or hearing aid;

(f)    in respect of a medical or surgical appliance (not otherwise specified in this definition) prescribed by a legally qualified medical practitioner;

(g)  for:

(i)     the testing of eyes or the prescribing of spectacles by a person legally qualified to perform these services; or

(ii)   the supply of spectacles in accordance with any such prescription;

(h)  as remuneration of a person for services rendered by him as an attendant of a person who is blind or permanently confined to bed or an invalid chair; or

(i)     for the maintenance of a dog used for the guidance or assistance of, but not social therapy for, a person with a disability, being a dog that the Commissioner is satisfied is properly trained in the guidance or assistance of persons with disabilities.

The expenses incurred on the joining fee and postage do not meet the definition of medical expenses under subsection 159P(4) of the ITAA 1936.

Consequently, you are not entitled to include the expenses incurred on the joining fee and postage as medical expenses for the purposes of the medical expenses tax offset available under section 159P of the ITAA 1936.