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Edited version of your written advice
Authorisation Number: 1012703548414
Ruling
Subject: Medical expenses tax offset
Question
Are you entitled to a medical expenses tax offset (METO)?
Answer
No.
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.
Your taxable income for the 2012-13 financial year was less than the tax free threshold.
Your income for the 2013-14 financial year is less than $88,000.
Your spouse claimed the METO in the 2012-13 financial year.
Your spouse died during the 2013-14 financial year.
You incurred expenses for disability aids in the 2013-14 financial year. However, these expenses were less than the claim threshold.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Reasons for decision
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 is related to an aid for a person with a disability, aged care or attendant costs for a person with a disability.
In your case, you did not receive a medical expenses tax offset in the 2012-13 financial year. Furthermore, you would not have been entitled to receive a tax offset because your taxable income was less than the tax free threshold.
Therefore, you would only be entitled to a METO in the 2013-14 financial year if you had eligible expenses over the claim threshold of $2,162 that relate to an aid for a person with a disability, aged care or attendant care.
In your case, you incurred expenses for disability aids. It is accepted that you have a disability, and the aids relates to an aid for a person with a disability. However, as your out-of-pocket expenses for the aids are less than the claim threshold, you are not entitled to a METO.