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Edited version of your written advice
Authorisation Number: 1012845129893
Date of advice: 23 July 2015
Ruling
Subject: Medical expenses tax offset
Question 1
Are you entitled to claim a medical expense tax offset?
Answer
No
This ruling applies for the following periods:
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You have been diagnosed with gender dysphoria. You are currently transitioning.
You have incurred medical expenses associated with the transitioning.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Reasons for decision
Section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) allows a tax offset for a percentage of the cost of net medical expenses above the relevant threshold.
From the 2013-14 financial year onwards, you can only claim the tax offset if:
• You have claimed the tax offset in the 2012-13 financial year; or
• You have incurred expenses relating to:
• An aid for a person with a disability
• An attendant of a person with a disability; or
• Care provided by an approved provider to a care recipient.
In your case, you did not claim the medical expense tax offset in the 2012-2013 financial year, hence it must be determined whether you have incurred expenditure on aids for a person with a disability.
A disability is defined as a restriction or impairment which has lasted, or is likely to last, for a period of six months or more, and which restrict a person's everyday activities. This includes blindness, deafness, chronic physical pain, breathing difficulties, incomplete use of limbs or digits, long-term effects of head injury or stroke, restriction in physical activities or work and the like.
The Explanatory Memorandum to the Tax and Superannuation Laws Amendment (2014 Measures No. 1) Bill 2014 defines disability aids as follows:
Disability aids
3.27 The concept of a disability aid …. is intended to mean an instrument, apparatus, assistance device or any other item of property that is manufactured as, distributed as, or generally recognised to be, an aid to the function or capacity of a person with a disability.
A disability aid would be considered to be an aid to function or capacity if it helps a person in performing activities of daily living or provides assistance to alleviate the effect of the disability. However, generally speaking, an ordinary or general household or commercial appliance is not a disability aid even if it helps a disabled person.
In your case you have incurred expenses as a result of transitioning after being diagnosed with gender dysphoria. Gender identity is no longer considered a mental illness in an Australian state, hence would not be considered to be a disability.
Furthermore, these would not be considered to be disability aids in accordance with the above definition as they are not a device or apparatus manufactured or generally recognised as an aid in the function or capacity of a disabled person. Disability aids include items such as wheelchairs, hearing aids, oxygen tanks, mobility aids and walkers, prosthetic limbs and learning aids.
The expenses you have incurred therefore do not allow you to claim a medical expenses tax offset.