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Subject: Deduction for hearing aids
Question
Are you entitled to a deduction for the cost of hearing aids?
Answer
No.
This ruling applies for the following period
Year ended 30 June 2012
The scheme commenced on
1 July 2011
Relevant facts
You are an Australian resident.
You are an employee and you also run a business.
You have complete hearing loss on one side.
You have found it difficult to hear people on that side because of the noises in your work place.
You have looked into getting a Cross Hearing aid which transfers the voices from the one side to your other side whilst filtering out the unwanted noise.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.
Generally medical expenses have no direct connection to the gaining or producing of assessable income as the purpose of the expense is to return you to health. The expense relates to a personal medical condition and is private in nature. There is insufficient connection to the gaining or production of assessable income for a deduction to be allowed as the expenditure is too remote.
Taxation Ruling IT 2217 addresses income tax deductions for medical appliances. It refers to the decision in Case P31 82 ATC 141; Case 96 26 CTBR (NS) 715 where it was found that the sole purpose of a hearing aid was to aid the taxpayer in overcoming a personal disability in order to earn assessable income. The court held that although the taxpayer might be unable to earn the assessable income without the aid of a hearing aid, the outlay was not incurred in gaining assessable income but rather was incurred to help overcome an unfortunate disability suffered by the taxpayer.
In your case, you gain your income from activities as an employee and in your business. You suffer from a hearing loss on one side and the hearing aids will transfer the voices on one side to the other side from which you hear. However, the expense is not considered to be incurred in gaining your assessable income, but rather incurred in overcoming a medical condition.
Therefore, you cannot claim a deduction for the cost of a hearing aid as it does not relate to the earning of your assessable income.