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Edited version of your private ruling
Authorisation Number: 1012524090148
Ruling
Subject: Medical expenses
Question
Can general practitioner (GP) and specialist prescribed medication bought from outlets other than pharmacies be included in the calculation of a medical expenses tax offset?
Answer
Yes
This ruling applies for the following period
Year ended 30 June 2013
The scheme commenced on
1 July 2012
Relevant facts
Your spouse is required to take complementary medicines and nutritional supplements prescribed and overseen by their GP.
As the doctor who prescribed these medications previously has moved interstate, medication has been purchased from pharmacies. Those not available from a pharmacy have been purchased from complementary health centres and health food shops.
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. Please note that the threshold amount is subject to indexation and from the 2012-13 financial year is also subject to income testing and this will change the threshold in future years.
Medical expenses are defined in subsection 159P(4) of the ITAA 1936. Paragraph (d) of the definition includes payments for therapeutic treatment administered by direction of a legally qualified medical practitioner.
Although the treatment must be administered by direction of a legally qualified medical practitioner, the treatment need not be administered by such a practitioner.
The Administrative Appeals Tribunal found in Case R95 84 ATC 633; Case 148 27 CTBR (NS) 1154 that therapeutic treatment necessitated the exercise of professional skill in the medical field. This would normally involve the person administering the treatment using chemical agents or drugs or some physical and mental processes which are directed towards the cure or management of a disease or ailment.
In your case your spouse is undergoing a treatment program for an illness that is being administered under the direction of a legally qualified medical practitioner. The costs incurred for this therapeutic treatment includes prescribed complementary medicines and nutritional supplements purchased from outlets other than pharmacies. Your expenditure on these items qualifies as a medical expense under paragraph (d) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936. Therefore this expenditure can be included when calculating the medical expenses tax offset.