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Edited version of your written advice
Authorisation Number: 1012892921396
Date of advice: 14 October 2015
Ruling
Subject: Medical expenses
Question
Are you entitled to a medical expenses tax offset for the 2013-14 or 2014-15 financial years?
Answer
No.
This ruling applies for the following periods
Year ended 30 June 2014
Year ended 30 June 2015
The scheme commenced on
1 July 2013
Relevant facts
You have spent money each year on expenses relating to your illness.
Your income for the 2013-14 and 2014-15 financial years was below the tax free threshold and you did not have any tax payable.
You received a medical expenses tax offset in the 2012-13 financial year.
Your medical expenses did not relate to disability aids, attendant care or aged care.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Reasons for decision
A medical expenses tax offset may be available under subsection 159P(1) of the Income Tax Assessment Act 1936 where you pay certain medical expenses in an income year for yourself or a dependant who is an Australian resident, to the extent that you are not reimbursed, or are eligible to be reimbursed, from a government or public authority or a society, association or fund.
Under recent changes to the legislation, the medical expenses tax offset is being phased out.
To be eligible to claim this offset in 2013-14, you must have either:
• received this offset in your 2012-13 income tax assessment, or
• paid for medical expenses relating to disability aids, attendant care or aged care.
To be eligible to claim a medical expenses tax offset in 2014-15, you must have either:
• received this offset in your 2012-13 and 2013-14 income tax assessments, or
• paid for medical expenses relating to disability aids, attendant care or aged care.
An offset reduces the amount of tax payable. Generally tax offsets cannot exceed the amount of tax otherwise payable and any unused offsets cannot be carried forward to be offset off against tax payable in future years. Although the legislation does allow for some refundable tax offsets, the medical expenses tax offset is not refundable.
In your case you received a medical expenses tax offset in the 2012-13 financial year. However for the 2013-14 financial year you had low income and no tax payable, therefore you did not receive a medical expenses tax offset.
Similarly in the 2014-15 financial year you had no tax payable on your taxable income and therefore did not receive a medical expenses tax offset.
Your specific circumstances are acknowledged, however, the legislation provides no discretion in your situation and does not allow a medical expenses tax offset.