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Edited version of your written advice
Authorisation Number: 1012672760308
Ruling
Subject: Medical expenses tax offset
Question
Can you include the cost of your surgery in a calculation for a medical expenses tax offset (METO)?
Answer
Yes.
This ruling applies for the following period
Year ended 30 June 2014
The scheme commenced on
1 July 2013
Relevant facts
You did not claim a medical expenses tax offset for the 2012-13 financial year.
You have undergone surgery in respect of a disability aid.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Reasons for decision
A medical expenses tax offset is available to a taxpayer under sub-section 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 term 'medical expenses' is defined in sub-section 159P(4) of the ITAA 1936. Paragraph (a) of the definition includes payments made to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation. Paragraph (h) includes remuneration of a person for services rendered by them as an attendant of a person who is blind or permanently confined to a bed or an invalid chair.
On 14 May 2013, the government announced in the 2013-14 Budget that it will phase out the net METO.
From 1 July 2013, those taxpayers who received the offset in their 2012-13 income tax assessment will continue to be eligible for the offset for the 2013-14 income year if they have eligible out-of-pocket medical expenses above the relevant claim threshold. Similarly, those who receive the tax offset in their 2013-14 income tax assessment will continue to be eligible for the offset in 2014-15.
For the 2013-14 to 2018-19 financial years, an amount that would otherwise be paid as medical expenses is treated as not being paid as medical expenses unless the payment, among other things, relates to an aid for a person with a disability.
In your case, you have undergone surgery. It is accepted that you have a disability, and the surgery relates to an aid for a person with a disability. Therefore, you can include the expenses relating to the surgery as eligible expenses for the purpose of claiming the METO.