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Ruling
Subject: Medical expenses tax offset
Question:
Are amounts you pay to a carer in order to assist your dependent child with a disability to attend school allowable as expenses for the purpose of calculating the medical expenses tax offset?
Answer:
Yes.
This ruling applies for the following periods:
Year ended 30 June 2012
Year ended 30 June 2013
Year ended 30 June 2014
The scheme commences on:
1 July 2011
Relevant facts and circumstances
Your dependent child has a diagnosed disability.
Your child is unable to mobilise normally and needs a wheelchair for this purpose.
In order for the child to attend school, a carer was recommended by a legally qualified medical practitioner. Half the cost of the carer is paid by you.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Reasons for decision
A medical expenses tax offset is available under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) where you incur medical expenses in an income year for yourself and/or a dependant who is an Australian resident.
The medical expenses tax offset is means tested from 1 July 2012. Where your adjusted taxable income is above the Medicare Levy Surcharge (MLS) thresholds ($84,000 for singles and $168,000 for couples or families in 2012-13) you may claim a tax offset of 10 per cent for eligible out of pocket expenses in excess of $5,000. Where your adjusted taxable income is below that of the MLS threshold you may claim a tax offset of 20% for the net medical expenses over the threshold amount ($2,060 in 2011-12; $2,120 in 2012-13).
Medical expenses are defined in section 159P(4) of the ITAA 1936 to include payments made to a person providing services as an attendant of a person who is blind or permanently confined to a bed or invalid chair (paragraph (h) of the definition).
In your case your child is unable to move to any reasonable extent without the aid of a wheelchair. The child's mobility is therefore limited in that they are unable to attend to their basic needs without the assistance of the chair. In this respect it is considered that they are permanently confined to an invalid chair and therefore the cost of an attendant to provide them with assistance would be an eligible medical expense for the purposes of claiming the medical expenses tax offset.
Note
The threshold amounts for the medical expenses tax offset and the Medicare Levy Surcharge change each income year.