ATO Interpretative Decision
ATO ID 2007/189 (Withdrawn)
Income Tax
Medical expenses: tax offset - payments for attendant assisting in employment dutiesFOI status: may be released
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This ATO ID is withdrawn because the Tax Office is reconsidering the position stated in the ATO IDThis document has changed over time. View its history.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Does remuneration paid, by a taxpayer who is permanently confined to a wheelchair and who is employed in a capacity principally for their intellectual exertions, for the services of an attendant who assists the taxpayer by carrying out the incidental physical tasks as required by the taxpayer's employment qualify as medical expenses pursuant to paragraph (h) of the definition of that term in subsection 159P(4) of the Income Tax Assessment Act 1936 (ITAA 1936) for the purposes of a medical expenses tax offset?
Decision
Yes. Remuneration paid, by a taxpayer who is permanently confined to a wheelchair and who is employed in a capacity principally for their intellectual exertions, for the services of an attendant who assists the taxpayer by carrying out the incidental physical tasks as required by the taxpayer's employment does qualify as medical expenses pursuant to paragraph (h) of the definition of that term in subsection 159P(4) of the ITAA 1936 for the purposes of a medical expenses tax offset.
Facts
The taxpayer is permanently confined to a motorised wheelchair.
The taxpayer is employed in a capacity principally for their intellectual exertions but has limited ability to perform the incidental physical tasks pertaining to that employment.
The taxpayer employs an attendant to assist in addressing their disability. The attendant performs the incidental physical tasks as required by the taxpayer's employment without contributing to the taxpayer's intellectual outputs for the taxpayer's employer.
Reasons for Decision
Section 159P of the ITAA 1936 allows a tax offset for certain net 'medical expenses' that a taxpayer may pay during an income year.
Paragraph (h) of the definition of the term 'medical expenses' in subsection 159P(4) of the ITAA 1936 describes medical expenses 'as remuneration of a person for services rendered by him as an attendant of a person who is blind or permanently confined to a bed or an invalid chair'.
The term 'attendant' is not defined in the ITAA 1936 or the Income Tax Assessment Act 1997 (ITAA 1997). Accordingly, it will have its ordinary meaning, having regard to the purpose and context of the provisions in which it appears: Chaudhri v. Federal Commissioner of Taxation 2001 [2001] FCA 554; ATC 4214; (2001) 47 ATR 126. The Macquarie Dictionary, 2005, 4th edition, The Macquarie Library Pty Ltd., (NSW), relevantly defines an attendant as '...someone who provides personal support and physical assistance for a person with a physical disability'.
Subparagraphs (a) to (i) of the definition of medical expense in subsection 159P(4) of the ITAA 1936 specify medical expenses which aid, address, treat or overcome an illness, medical condition or disability. In this context, the meaning of 'attendant' in subparagraph (h) of the definition of medical expenses is a person who supports and assists the person who is blind or permanently confined to a bed or an invalid chair while they perform functions that they can with that care or assistance. The phrase 'as an attendant' in subparagraph (h) defines the relevant services as those necessitated by or founded in the disability: that is, not just services rendered to the person with a disability but services rendered to the person because they are disabled.
Therefore to satisfy subparagraph (h) of definition of medical expenses in subsection 159P(4) of the ITAA 1936, the relevant services taken into account in paying remuneration must be:
- (a)
- performed by a person who supports and assists the person with a disability with the performance of functions that the person with disability can do with that support and assistance; and
- (b)
- necessitated by the disability of the person.
In this case, the attendant supports and assists the taxpayer to undertake their role as an employee engaged in a capacity principally for their intellectual exertions. The taxpayer is solely responsible for rendering the intellectual outputs required by the employer. The attendant supports and assists the taxpayer by carrying out the incidental physical requirements of the taxpayer's employment. The services rendered by the taxpayer's attendant are necessitated by the taxpayer's disability and not by the duties of the taxpayer's employment.
Accordingly, payment of remuneration to the attendant for services necessitated by the taxpayer's disability which are rendered as the taxpayer carries out their employment duties qualify as medical expenses pursuant to paragraph(h) of the definition of that term in subsection 159P(4) of the ITAA 1936.
Date of decision: 03 July 2007Year of income: Year ended 30 June 2007 Year ended 30 June 2008 Year ended 30 June 2009 Year ended 30 June 2010 Year ended 30 June 2011
Legislative References:
Income Tax Assessment Act 1936
section 159P
subsection 159P(4)
Case References:
Chaudhri v. Federal Commissioner of Taxation
[2001] FCA 554
2001 ATC 4214
(2001) 47 ATR 126
ATO ID 2007/190
Keywords
Medical expenses
Medical expenses rebates
ISSN: 1445-2782
Date: | Version: | |
3 July 2007 | Original statement | |
You are here | 26 October 2007 | Archived |