Edited version of your written advice

Authorisation Number: 1012866894306

Date of advice: 26 August 2015

Ruling

Subject: Medical expenses

Question

Is a procedure considered a disability aid for the purposes of the Medical Expenses Tax Offset?

Answer

No

This ruling applies for the following period(s)

Year ended 30 June 2015

The scheme commences on

1 July 2014

Relevant facts and circumstances

The arrangement that is the subject of the private ruling is described below. This description is based on the following documents. These documents form part of and are to be read with this description. The relevant documents are:

• the application for private ruling

• Appendixes A,B,C.D

• Copies of letters from your Surgeon and

• Copy of estimate of medical fees

You were required to have a procedure to treat a condition.

This procedure is not available in the public health system and you have incurred out of pocket expenses.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 159P(1)

Income Tax Assessment Act 1936 Paragraph 159P(1B)(a)

Reasons for decision

The net medical expenses tax offset (NMETO) is being phased out between the 2013-14 and 2018-19 income years and eligibility for this offset has changed restricting who can claim and what medical expenses can be claimed.

Transitional arrangements will allow taxpayers to claim the offset from the 2013-14 income year until the end of the 2018-19 income year, but only for those medical expenses relating to disability aids, attendant care or aged care, regardless of whether they have received an amount of the NMETO in the previous year.

Based on your circumstances paragraph 159P(1B)(a) of the of the Income Tax Assessment Act 1936 would be the only provision where your expenses can be considered. This paragraph states:-

For the 2013-14 to 2018-19 years of income, an amount that would otherwise be paid as medical expenses is treated as not being paid as medical expenses unless the payment relates to an aid for a person with a disability.

A person who is considered to be disabled is entitled to claim the cost of a disability aid towards meeting the net medical expense relevant threshold. This is provided that the aid is designed to be an 'aid to function or capacity'. That is, the aid helps a person in performing activities of daily living or provides assistance to alleviate the effect of the disability.

Disability aids are items of property manufactured as, distributed as, or generally recognised to be, an aid to the function or capacity of a person with a disability. Anyone with a disability can go to a supplier and purchase these types of items but, generally will not include ordinary household or commercial appliances.

Examples include wheelchairs, walking frames, hearing aids, car controls for the disabled and similar appliances.

In your case you were required to have a procedure to treat a condition, this does not change the fact that payments were made to a hospital and legally qualified medical practitioner in relation to a surgical procedure.

Furthermore, this procedure is not considered to be a disability aid in accordance with the above definition as it is not a device or apparatus manufactured or generally recognised as an aid in the function or capacity of a disabled person.

Therefore the costs involved with the procedure are not considered to be eligible medical expenses for the purposes of the NMETO