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Edited version of your written advice
Authorisation Number: 1012846241647
Date of advice: 24 July 2015
Ruling
Subject: Hearing aids
Question
Are you entitled to a deduction with respect to your hearing aids?
Answer
No.
This ruling applies for the following periods:
Year ended 30 June 2015
The scheme commences on:
1 July 2014
Relevant facts and circumstances
You are an employee.
You received a medical that stated you must wear your hearing aids at work to retain your position.
It is an occupational health and safety issue that requires that you always wear your hearing aids.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Income Tax Assessment Act 1997 Section 40-25.
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.
Section 40-25 of the ITAA 1997 allows a deduction for the decline in value (depreciation) of a depreciating asset to the extent to which it is incurred in gaining or producing assessable income.
Generally medical expenses have no direct connection to the gaining or producing of assessable income as the purpose of the expense is to return you to health or to help overcome a medical condition. The expense relates to a personal medical condition and is private in nature. There is insufficient connection to the gaining or production of assessable income for a deduction to be allowed as the expenditure is too remote.
Taxation Ruling IT 2217 addresses income tax deductions for medical appliances. It refers to the decision in Case P31 82 ATC 141; Case 96 26 CTBR (NS) 715 where it was found that the sole purpose of a hearing aid was to aid the taxpayer in overcoming a personal disability in order to earn assessable income. The court held that although the taxpayer might be unable to earn the assessable income without the aid of a hearing aid, the outlay was not incurred in gaining assessable income but rather was incurred to help overcome an unfortunate disability suffered by the taxpayer.
In your case, you purchased hearing aids which you are always required to wear at your worksite. This expense is not considered to be incurred in gaining your assessable income, but rather incurred in overcoming a medical condition.
Therefore, you cannot claim a deduction for the cost of the hearing aids or for the decline in value of the hearing aids as it does not relate to the earning of your assessable income.