Financial
FACT SHEET
Medical Expenses Rebates
The Federal Government’s Net Medical
Expenses Tax Offset (NMETO) is designed
to help individuals and families partially
cover the cost of certain medical costs each
financial year.
»» to a legally qualified medical practitioner, »»
As it applies to the 2011-2012 financial year,
you can claim a tax offset of 20% of your
net medical expenses over $2,060. These
medical expenses can only be claimed for:
»» you;
»» your spouse, or de facto spouse;
»» your children under 21 years of age, »»
regardless of their income (including adopted or stepchildren and children of your spouse); and
any other person eligible for a tax offset as a dependant, including parents, parents-in-law, child-housekeeper and invalid relatives.
You and your dependants must be
Australian residents for tax purposes but
you can claim medical expenses paid while
travelling overseas.
Eligible expenses for NMETO
‘Net medical expenses’ are defined as the
amount of payments made after deducting
reimbursements received or receivable
from Medicare or a private health fund. This
includes payments:
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nurse or chemist, or a public or private hospital, in respect of an illness or operation;
to a legally qualified dentist for dental services or treatment of artificial teeth;
to a person registered under a law of a state/territory for supply, alteration or repair of artificial teeth;
for therapeutic treatment administered by referral from a legally qualified medical practitioner (eg. physiotherapist, speech therapist);
for the purchase or repair of an artificial limb (or part of one), an artificial eye or hearing aid;
for the purchase or repair of medical aids prescribed by legally qualified medical practitioner;
for the testing of eyes, or the prescribing of any spectacles by a person legally qualified to perform those services, or for the supply or repair of spectacles in accordance with such a prescription;
to a person who looks after someone who is blind, or confined to bed or wheelchair;
to keep a trained guide dog for a blind person; and
to keep a trained dog to assist or guide the hearing impaired or other disabled individuals.
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This Fact Sheet contains general advice that has
been prepared without considering your objectives,
financial situation or needs. You should consider the
appropriateness of any advice before acting on it.
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Medical Expenses Rebates
Non-qualifying medical
expenses
There are some treatments that are not
covered:
»» therapeutic treatment not formally »»
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referred by a doctor – a mere suggestion or recommendation by a doctor to the patient is not enough for the treatment to qualify; the patient must be referred to a particular person for specific treatment;
chemist-type items – such as tablets for pain relief – purchased in retail outlets or health food stores;
vaccinations for overseas travel;
non-prescribed vitamins or health foods;
travel or accommodation expenses associated with medical treatment;
payment for domestic services (house cleaning or maintenance) rendered to a person who is blind or confined to a wheelchair or bed;
contributions to a private health fund;
purchases from a chemist that are not related to an illness or operation;
life insurance medical examinations;
ambulance charges and subscriptions; and
funeral expenses.
Procedures that are solely for cosmetic
or beauty purposes which alter a person
superficially are also ineligible for the
rebate. However, some legitimate cosmetic
procedures do qualify – eg. reconstructive
surgery following an accident or operation.
Residential aged care costs
The offset is available for residential aged care
costs, provided the person they are being
claimed for is an approved recipient of respite
care.
To be approved, the recipient needs to be
assessed by an aged care assessment team
(ACAT) to determine which services they may
be eligible for as well as working out how
well they are able to cope with daily living
activities and their own care. Where eligible,
the NMETO can be claimed for:
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basic daily fees;
income tested daily fees;
extra service fees;
accommodation charges;
amounts deducted or retained from accommodation bonds where the bonds were paid as a lump sum;
interest charged on an outstanding instalment of a lump sum accommodation bond; and
periodic payments of accommodation bonds.
Note that retirement home payments are not
included in the offset. Only payments made
to nursing hostels, or homes for an approved
person’s respite or permanent care can be
claimed.
Claiming the NMETO
for 2011-2012
To claim, you will need to:
»» keep all receipts for medical expenses over the course of the year;
payment;
private health insurer may have provided.
»» work out the total amount of each »» work out any refunds Medicare or your On the next page is a simple worksheet you
can use as a guide to calculate your medical
expenses rebate:
continued over
Medical Expenses Rebates
Net Medical Expenses Tax Offset Worksheet
Add up all your allowable medical expenses.
$
(a)
Add up all refunds relating to these expenses which you or any
other person has received or are entitled to receive.
$
(b)
Subtract (b) from (a). This is your net medical expense amount.
$
(c)
Subtract $2,060 from (c).
$
(d)
If (d) is less than $0 you cannot claim a tax offset.
Divide (d) by 5 to get 20%. The amount at (e) is your medical
expenses tax offset
$
(e)
IMPORTANT NOTE: The Federal Government has revised the eligibility for the NMETO for
2012-2013 by imposing an income test for taxpayers earning more than $84,000 (singles) or
$168,000 (couples or families).
These taxpayers will only be able to claim a reimbursement of 10% for eligible out of pocket
expenses incurred in excess of $5,000 (indexed annually). However, the family threshold will
increase by $1,500 for each dependent child after the first.
Taxpayers with an adjusted taxable income below these thresholds will still be able to claim
a reimbursement of 20% for net medical expenses over $2,120 (CPI indexed for 2012-2013)
when they lodge their tax return.