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Ruling

Subject: Medical expenses tax offset

Question

Can the expenses for the purchase of an adjustable bed and pressure mattress be included in your calculation of a medical expenses tax offset?

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 have a medical condition which makes it very difficult for you to lie and sleep on a conventional bed and mattress.

You incurred costs in relation to:

· a pressure care mattress

· an adjustable health bed

You have a report from your doctor confirming that you have a medical condition, and advising that you require a highly supportive mattress and adjustable support for spinal care.

You purchased an adjustable bed and pressure care mattress from a specialist in adjustable health beds and other items, on the recommendation of your doctor.

You have paid the full price yourself and have not received, and are not entitled to, any reimbursement from any source.

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 159P

Income Tax Assessment Act 1936 Subsection 159P(4).

Reasons for decision

A medical expenses tax offset is available to a taxpayer under section 159P 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.

The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed $2,060 for the 2011-12 income year.

Medical expenses are defined in subsection 159P(4) of the ITAA 1936 to include expenses in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner.

A 'medical or surgical appliance' for the purposes of paragraph (f) of the definition of 'medical expenses' in subsection 159P(4) is an instrument, apparatus or device which is:

a) manufactured as; or

b) distributed as; or

c) generally recognised to be an aid to the function or capacity of a person with a disability or illness.

An appliance is an aid to function or capacity if it helps a person in performing activities of daily living.

However, generally, a household or commercial appliance is not a 'medical or surgical appliance'. Also the fact that an item gives therapeutic treatment, in that it relieves, heals or prevents a medical condition, does not make it a 'medical or surgical appliance'. Similarly the fact that a medical practitioner may recommend an item does not make the item a medical or surgical appliance.

In considering whether an item is a medical or surgical appliance, it is the character of the item which is determinative, not the purpose for which it is prescribed or used. While it is acknowledged that the pressure care mattress and adjustable health bed may aid the function of a person with a disability or illness, the items themselves retain their domestic function of being a place to sleep in a household setting. Their character remains in essence as pieces of household furniture, and they are not considered to be medical or surgical appliances. Whilst the adjustable bed and mattress were purchased from a store specialising in these items this does not alter the fact that the items are not considered to be eligible medical tax offset expenses.

Therefore the expenditure for the adjustable bed and the pressure care mattress cannot be included in the calculation of your net medical expenses.