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Edited version of your written advice
Authorisation Number: 1051317736156
Date of advice: 7 December 2017
Ruling
Subject: Orthotics
Question
Are you entitled to claim a deduction for the cost of your orthotics?
Answer
No
This ruling applies for the following period(s)
Year ending 30 June 2018
The scheme commences on
1 June 2017
Relevant facts and circumstances
You have recently been diagnosed with a medical condition.
Your employer has agreed to pay for the specially required safety boots.
You are required to pay approximately $xx for specially manufactured inserts to be fitted in your safety work boots.
The inserts can be removed annually and refitted into new work safety boots.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
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.
Generally medical expenses have no direct connection to the gaining or producing of assessable income. The expense relates to overcome 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 decisions in Case Q17 83 ATC 141; Case 82 26 CTBR (NS) 715: Gilbert v.Federal Commissioner of Taxation 82 ATC 141; Taxation Case 96 25 CTBR (NS) 715 which found that the sole purpose of a medical appliance was to aid the taxpayer in overcoming a personal disability. Although the taxpayer might be unable to earn assessable income without the aid of the relevant appliance, the outlay on the appliance was not incurred in gaining that assessable income but rather was incurred to help overcome an unfortunate disability suffered by the taxpayer.
In your case, you needed to purchase inserts to assist you. In light of the principles outlined above, the costs of inserts are private in nature. The expenses are not considered to be incurred in gaining your assessable income, but rather incurred in overcoming a medical condition.
Therefore, you are not entitled to claim a deduction for this expenditure as it is private in nature.