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Ruling
Subject: Medical expenses tax offset
Question 1:
Are you entitled to include in your calculation of the medical expenses tax offset amounts paid for travel, accommodation, food and incidentals?
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
In late 2011 you flew from location A to location B for a holiday.
While away on holidays you were hospitalised due to a medical condition.
You were required to extend your stay so that you could attend your follow up appointment with the hospital.
The doctor advised you not to fly and as a result you had to alter your mode of travel to return home.
Family members flew to location B to be with you until your return home.
You travelled by train from location B to location C on your own.
One of your family members then travelled to location C and hired a rental vehicle to drive you home.
You have provided a spreadsheet which lists the additional costs associated with your extended stay in location B and your trip home.
The spreadsheet identifies the amounts paid by yourself and family members.
You and the family members are not dependants of each other for taxation purposes.
Relevant legislative provisions
Income Tax Assessment Act 1936 Subsection 159P(1)
Income Tax Assessment Act 1936 Subsection 159P(4)
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.
The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed the threshold. For the 2011-12 financial year the threshold is $2,060. Please note that the threshold amount is subject to indexation and will change in future years.
Subsection 159P(4) specifically defines medical expenses which are eligible for the medical expenses tax offset as payments:-
(a) to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation; or
(b) to a legally qualified dentist for dental services or treatment or the supply, alteration or repair of artificial teeth; or
(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; or
(d) for therapeutic treatment administered by direction of a legally qualified medical practitioner; or
(e) in respect of an artificial limb (or part of a limb), artificial eye or hearing aid; or
(f) in respect of a medical or surgical appliance (not otherwise specified in this definition) prescribed by a legally qualified medical practitioner; or
(g) for:
(i) the testing of eyes or the prescribing of spectacles by a person legally qualified to perform those services; or
(ii) the supply of spectacles in accordance with any such prescription; or
(h) as remuneration of a person for services rendered by him or her as an attendant of a person who is blind or permanently confined to a 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 cost of travel, accommodation, food and incidental expenses do not fall within any of the categories of medical expenses as defined, as the eligible payments are restricted to the cost of the actual treatment provided.
Accordingly, the travel, accommodation, food and incidental expenses paid for as a result of you suffering from a medical condition whist away from home do not qualify as medical expenses as defined in subsection 159P(4) of the ITAA 1936 and cannot be included when calculating the medical expense tax offset.