Medical expenses
Singles and families may
be able to claim a tax
tax offset is completely phased out.
Nevertheless, you may still be able to claim
offset for out-of-pocket
disability aids, attendant care or aged care
medical expenses
incurred during the year.
expenses above the relevant claim amount until 1
July 2019, even if these expenses have not been
claimed in the prior year.
Please note the net
medical expenses tax
Net Medical Expenses from 1 July 2013
offset is means tested
from 1 July 2012 and is
Income below MLS
Income above MLS
being phased out in the
20% of excess above
$2,120
10% of excess above
$5,000
upcoming financial years.
Qualifing for the tax offset
Eligible medical expenses
The offset applies to medical expenses incurred
Not all medical expenses are eligible for the
for an individual and their dependants. For the
purposes of this offset, dependants include your
spouse and children under the age of 21,
medical expense tax offset, such as solely
cosmetic procedures including beautifying or
superficial alteration. Cosmetic procedures for
regardless of their income. Full time students
under the age of 25 who you maintained are also
your dependents if their income is below the
legitimate medical needs (e.g. reconstructive
surgery) can still be eligible. If there is no
Medicare benefit payable in respect of the
relevant threshold for the year.
cosmetic procedure, the expense is likely to be an
ineligible medical expense.
In order to qualify for a tax offset, your total
medical expenses (after refunds from Medicare
Doctors, nurses and pharmacists
and/or your private health insurer) must exceed
Payments to legally qualified medical practitioners,
the relevant threshold.
nurses and pharmacists qualify for the tax offset if
If your adjusted taxable income is below the
pertaining to an illness or operation. Life
Medicare levy surcharge (MLS) threshold ($84,000
insurance, medical examinations and vaccinations
for singles and $168,000 for couples or families),
required for overseas travel are not eligible.
you will be eligible to claim a reimbursement of
20% for net medical expenses over $2,120 for the
2013 financial year.
Prescribed and non-prescribed medications
The cost of medication purchased from a legally
qualified chemist qualifies for the medical expense
If your adjusted taxable income is above the
tax offset if it is purchased for an illness or
relevant threshold, you will only be able to claim a
operation, even if the medication was not
tax offset equivalent to 10% for net medical
prescribed by a doctor. Examples include pain
expenses incurred in excess of $5,000.
relief tablets and cough medicine.
Please note, in order to claim the offset in the
The tax offset does not apply to chemist-type
2014 income year, you must have had a claim in
items, such as those mentioned above, if they are
2013. This applies for each of the subsequent
purchased from another retailer such as a
years until 1 July 2019 when the medical expense
supermarket or health food store.
CHARTERED
ACCOUNTANTS
20 Albert Street / PO Box 256
Blackburn Victoria 3130
T: 03 9894 2500 F: 03 9894 1622
contact@youraccountant.com.au
Published June 2013
www.youraccountant.com.au
Therapeutic treatment
Therapeutic treatment may qualify for the medical
expense tax offset provided that the treatment is
administered at the direction of a medical
practitioner. Your doctor must first refer you to a
specific practitioner in order for the treatment to
be eligible.
Therapeutic treatment can include physiotherapy,
osteopathy, chiropractic treatment and massage,
dietetic treatment or speech therapy.
Vitamins and health foods
In most cases vitamins, health foods and other
similar items will not qualify for the tax offset as
they are not considered to be pertaining to an
illness or operation. To be eligible for the tax
offset, vitamins would have to be specifically
the payments were made:
To an approved aged care provider under the
Aged Care Act 1997; and
For personal or nursing care, not just for
accommodation.
A recipient of approved care is a person who has
been assessed by an Aged Care Assessment Team
(ACAT) as requiring high or low level care.
Daily fees are an example of an eligible expense.
However, accommodation bonds do not qualify as
they are solely for accommodation and not for
personal or nursing care. Further, payments to
retirement villages do not qualify.
Claiming the tax offset
prescribed by a medical practitioner for the
We have prepared a spreadsheet to assist you in
treatment of an illness or condition.
summarising your medical expenses. The
spreadsheet can be found at:
Dental & optical treatment
Payments to a dentist for dental services or
www.youraccountant.com.au/publications/resources
treatment will qualify for the medical expense tax
Please note some pharmacists can give you an
offset, unless they are solely cosmetic, e.g. teeth
annual statement showing all medications charged
bleaching.
during the year.
Payments made to optometrists and eye
You can also request an annual statement from
specialists are also eligible for the tax offset. This
your health insurance provider and from Medicare
includes payments for eye tests, prescription
which will show receipts presented and benefits
glasses and contact lenses. Surgery to correct
paid.
your vision is also eligible.
Surgical appliances
The cost of artificial limbs, hearing aids and other
assistive aids are eligible medical expenses. Such
items can include adhesive plaster and bandages,
wheelchairs and crutches.
Hospitals, hostels and nursing homes
Payments made to hospitals relating to an illness
Further information
For further information please contact the following
staff member:
Simon Dinér
simon.diner@youraccountant.com.au
Call our office on (03) 9894 2500
or operation will qualify for the tax offset,
provided the treatment is not solely cosmetic.
Liability limited by a scheme approved under Professional
Standards Legislation
Recipients of approved aged care for permanent
or respite care can also claim the tax offset for
payments made to residential aged care facilities
such as hostels and nursing homes provided that
Disclaimer: This publication has been prepared on the basis of
information available at the date of preparation. The information
is general in nature and is not to be taken as a substitute for
specific professional advice. We recommend that our advice be
sought on specific issues prior to acting on transactions affected.
FocusOn Medical Expenses