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Ruling
Subject: Medical expenses tax offset
Question
Is the cost of therapeutic treatment considered to be a medical expense for the purpose of claiming a medical expenses tax offset?
Answer
No.
This ruling applies for the following periods
Year ended 30 June 2010
Year ended 30 June 2011
The scheme commenced on
1 April 2010
Relevant facts
Your child suffered from depression because of a condition.
Your child underwent a procedure which was performed by a legally qualified medical practitioner.
A Medicare benefit is not payable for the treatment.
Relevant legislative provisions
Income Tax Assessment Act 1936 Subsection 159P(1)
Income Tax Assessment Act 1936 Subsection 159P(4)
Reasons for decision
Detailed reasoning
A medical expenses tax offset is available under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where you pay medical expenses in an income year for yourself and/or a dependant who is an Australian resident.
The medical expenses tax offset is only available if the amount of medical expenses (reduced by any entitlement to reimbursement from a health fund or government authority) exceeds the annual threshold. The tax offset is 20% of the amount by which the net medical expenses exceeds the annual threshold.
Medical expenses are defined in subsection 159P(4) of the ITAA 1936 to include payments to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation (paragraph (a) of the definition).
Paragraph 159P(4) of the ITAA 1936 defines 'ineligible medical expenses' as payments to a legally qualified practitioner, nurse or chemist, or a public or private hospital, in respect of a cosmetic operation that is not a professional service for which a Medicare benefit is payable. This provision applies to medical expenses paid from 1 July 2005 for the 2006 income year and forward.
In this case, a Medicare benefit was not payable. The cost of your child's treatment is an ineligible medical expense. Therefore, the expense does not constitute a medical expense as defined in subsections 159P(4) and (5) of the ITAA 1936.