Edited version of private advice

Authorisation Number: 1052239625244

Date of advice: 11 April 2024

Ruling

Subject: Deductions - medical certificates

Question

Are you entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for appointment and travel expenses incurred for obtaining medical certificates in relation to the payments you receive under your income protection insurance policy?

Answer

Yes.

Generally medical expenses have no direct connection to the gaining or producing of assessable income and a deduction is not allowable. Medical expenses for treatment and rehabilitation have a private character, even if they are a requirement for receiving assessable income. Subsection 8-1 (2) of the ITAA 1997 states that you cannot deduct a loss or outgoing if it is of a private or domestic nature.

However, where it can be shown that a medical expense has the required nexus between the expense and earning of assessable income, the expense may be deductible. Where the expense is required for payment of income protection benefits, there is a direct connection between the expense and the earning of assessable income.

In your case, you were required to fulfil certain requirements to receive assessable income protection payments, namely obtain medical certificates from a medical practitioner. As such the expenses for the medical certificates are expenses incurred to establish and retain your income protection payments. Therefore, you are entitled to a deduction for the amounts paid to your medical practitioner to receive the required medical certificates as well as the associated travel expenses.

Please note: You cannot claim medical expenses for treatment and rehabilitation as they are private in nature and therefore not deductible.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You have been a long-time employee of XXXX.

You have been diagnosed as having a mental health condition.

You have also suffered physical work-related injuries to your ankles, knees, elbows, shoulders and lower back.

You stopped working on XXXX due to your mental health condition.

On XXXX you began receiving worker's compensation payments under your income protection policy with your insurance provider.

You are required to obtain medical certificates in order for you to receive ongoing income protection payments.

You incurred travel and appointment expenses in relation to obtaining the medical certificates from your medical professionals.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1