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Edited version of your written advice
Authorisation Number: 1013046007726
Date of advice: 10 October 2018
Ruling
Subject: Medical Expenses Tax Offset
Question
Are you entitled to include the device expenses in your calculation of the medical expenses tax offset?
Answer
No
This ruling applies for the following period
Year ended 30 June 20XX
The scheme commenced on
1 July 20XX
Relevant facts
Your child has an illness.
They are using devices in therapy daily.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Income Tax Assessment Act 1936 Subsection 159P(4)
Reasons for decision
Section 159P of the ITAA 1936 provides the conditions for claiming the NMETO. As of 1 July 2015 you are only able to claim the NMETO if you have claimed the offset in the 2013-14 and 2014-15 income periods. The exception to this is if the expense relates to an aid for a person with a disability, relates to a service rendered by a person as an attendant of a person with a disability or relates to care provided by an approved provider under the Aged Care Act 1997.
There are still the other three criteria which you can meet. You will not meet the requirement of a service rendered by a person as an attendant of a person with a disability and your expenses are not related to care provided by an approved provider. This means that the expenditure for your devices would have to meet the definition of a disability aid.
The schedule 3 of the explanatory memorandum for the Tax and Superannuation Laws Amendment (2014 Measures No. 1) Act 2014 provides some overview as to what a disability aid is. The act states:
Whether an expense is related to disability aids, attendant care or aged care will largely be a matter of fact and circumstance. During the phase-out period, additional guidance will be provided by the Australian Taxation Office to assist people with determining whether their expense is eligible to be claimed under the NMETO
The concept of a disability aid, for the purpose of these amendments, is intended to mean an instrument, apparatus, assistance device or any other item of property that is manufactured as, distributed as, or generally recognised to be, an aid to the function or capacity of a person with a disability.
This provides examples of aids such as wheel chairs or maintenance of guide dogs and as such devices do not meet this definition. Furthermore, example 3.6 states:
When completing his tax return for the 2014-15 income year Ross determines that he is unable to claim the NMETO for that year because he did not receive an amount of the NMETO in the 2013-14 income year (as his expenses were under the relevant thresholds for that year) and because his medical expenses for the 2014-15 income year were for major dental work and not related to disability aids, attendant care or aged care.
There is no doubt that your child has an illness which caused you to need to purchase devices however, for the purposes of the NMETO these do not qualify as a disability aid.