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Edited version of private advice
Authorisation Number: 1051592890164
Date of advice: 10 October 2019
Ruling
Subject: Pharmaceutical expenses
Question
Are you entitled to a deduction for the pharmaceutical expenses you incur which enable you to fulfil the medical requirements of your employment?
Answer
No.
This ruling applies for the following periods:
Year ended 30 June 2017 to year ended 30 June 2024
The scheme commences on:
1 July 2016
Relevant facts and circumstances
You suffer from medical conditions.
You are required to undergo an annual medical fitness examination and supply updated medical reports from treating Physicians or Specialists to maintain your current accreditation for your employment.
You incur expenses on prescribed medication to treat your medical conditions.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Section 8-1 of the Income Taxation Assessment Act 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.
Generally medical expenses have no direct connection to the gaining or producing of assessable income as the purpose of the expense is to return you to health. The expenses relate to a personal medical condition and are private in nature. There is insufficient connection to the gaining or production of assessable income for a deduction to be allowed.
Taxation Ruling IT 2217 addresses income tax deductions for medical appliances. It refers to the decisions in Case Q17 83 ATC 62; Case 82 26 CTBR (NS) 556 and Case P31; Gilbert v. Federal Commissioner of Taxation 82 ATC 141; Taxation Case 96 25 CTBR (NS) 715 where it was found that the sole purpose of a wheelchair or hearing aid was to aid the taxpayer in overcoming a personal disability in order to earn assessable income.
Although the taxpayer might be unable to earn the assessable income without the aid of the relevant appliance, the outlay on the appliance was not incurred in gaining the assessable income but rather was incurred to help overcome an unfortunate disability suffered by the taxpayer.
In your case, you have incurred pharmaceutical expenses to manage your medical conditions. You require medical examinations which demonstrate the conditions are under control in order for you to undertake your employment. These expenses are not incurred in gaining your assessable income, but rather incurred in overcoming a personal medical condition. This is considered private in nature and accordingly you are not entitled to a deduction for these expenses.