Edited version of your written advice

Authorisation Number: 1012905854415

Date of advice: 12 November 2015

Ruling

Subject: Medical expenses

Question 1

Are the costs of your doctor's consultation and receiving instruction on how to prepare and administer a medical procedure qualify for inclusion in the calculation of the medical expenses tax offset?

Answer

No.

Question 2

Are the costs of your travel overseas for the purpose of receiving instruction on how to prepare and administer a medical procedure qualify for inclusion in the calculation of the medical expenses tax offset?

Answer

No.

Question 3

Are the costs of your accommodation whilst overseas for the purpose of receiving instruction on how to prepare and administer a medical procedure qualify for inclusion in the calculation of the medical expenses tax offset?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 2014

The scheme commenced on:

1 July 2013

Relevant facts and circumstances

You are an Australian resident.

Your spouse was diagnosed with a medical illness.

You and your spouse travelled overseas.

The sole purpose of this trip was for you to undertake training to prepare and administer a medical procedure which is only available in the particular overseas country.

This was necessary for you to acquire the necessary skills in order for you to provide the daily care for your spouse that this mode of treatment requires.

You have incurred the following expenses:

• Doctor consultation and nurse's instruction

• Airfares

• Accommodation

You did not receive the medical expenses tax offset in the 2012-13 year.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 159P(1)

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

Reasons for decision

Consultation and instruction

A medical expenses tax offset is available under subsection 159P(1) of the Income Tax Assessment Act 1936 (ITAA 1936) where the taxpayer pays eligible medical expenses in an income year for themselves or a dependent who is an Australian resident.

The medical expenses tax offset is only available if the amount of medical expenses, after being reduced by any entitlement to reimbursement from a health fund or government authority such as Medicare, exceeds the threshold amount.

This tax offset is income tested. The percentage of net medical expenses you can claim and the threshold amount is determined by your adjusted taxable income (ATI) and family status. It should also be noted that the threshold amount is subject to indexation and will change in future income years.

The net medical expenses tax offset (NMETO) is being phased out between the 2013-14 and 2018-19 financial years and eligibility for this offset has changed.

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.

In addition, for the 2013-14 and 2014-15 income years, taxpayers will be eligible to claim the full range of medical expenses (as defined currently) but only if they have received an amount of the net medical expenses tax offset in the previous income year (or in both 2012-13 and 2013-14 in respect to claims in the 2014-15 income year).

In your case you did not receive an amount of the NMETO in your 2012-13 income tax assessment so you are limited to claims relating to disability aids, attendant care or aged care only.

Attendant care

The 'attendant care' provision is found in paragraph 159P(1B)(b) of the ITAA 1936. 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 services rendered by a person as an attendant of a person with a disability.

Whether your circumstances and the associated costs are to be considered as an attendant care service, consideration is now given to the Explanatory Memorandum (EM) to the Tax and Superannuation Laws Amendment (2014 Measures No.1) Bill 2014. Schedule 3 to this bill amends the ITAA 1936 to phase-out the NMETO and provides the following in relation to attendant care:-

3.30 The concept includes services and care provided to a person with a disability who needs personal assistance to complete activities of daily living, who is able to manage living in the community and who lives in their own home or in their own leased accommodation.

3.31 Attendant care services provide assistance with everyday tasks and include, for example, personal assistance, home nursing, home maintenance and domestic services.

The EM provides the following example of an attendant care service:

A person has an acquired brain injury and pays for an attendant to come to their home to assist with grooming, clothing and feeding activities during the day.

The expenses for the services provided by the attendant would be considered related to attendant care under this measure.

In your case, you have incurred expenses in relation to you personally receiving instruction on how to prepare and administer a medical procedure. This is not considered to be an attendant care service of providing assistance to complete activities of daily living to a person with a disability for the purposes of the medical expense tax offset. Rather, it is viewed as a personal cost to you in order to further your knowledge in respect of the treatment of your spouse's condition.

Accordingly, you are not entitled to include the costs you have incurred for the doctor consultation and nurse's instruction in preparing and administering a medical procedure in your calculation of the medical expenses tax offset.

Costs of travel and accommodation

All travel and accommodation expenses in relation to medical treatment are generally considered to be of a private nature and, as such, are not an allowable expense.

Accordingly, you are not entitled to include the costs for any of your travel, accommodation or other associated expenses in relation to your travel overseas in your calculation of the medical expenses tax offset.