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Ruling
Subject: Medical expenses tax offset
Question
Is the cost of corrective surgery an eligible medical expense?
Answer:
Yes.
This ruling applies for the following period
Year ended 30 June 2012
The scheme commenced on
1 July 2011
Relevant facts
You underwent cosmetic surgery which later caused a medical condition.
You then underwent surgery to correct the medical condition.
Part of the expense for the corrective surgery was reimbursed by Medicare.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P(4)
Reasons for decision
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.
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 your case, your surgery is a professional service for which a Medicare benefit is payable and considered to be an eligible medical expense. Therefore you can include the net expense in a calculation for a medical expenses tax offset.