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ATO Interpretative Decision

ATO ID 2003/978 (Withdrawn)

Income Tax
Medical Expenses Tax Offset: registration and CTP insurance of electric scooter

Attention This ATO ID is withdrawn. Guidance on the Net Medical Expenses Tax Offset can be found at Medical expenses on the ATO website (QC 31918).
Attention This document has changed over time. View its history.
FOI status: may be released
Status of this decision: Decision withdrawn 11 August 2017.

CautionCAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Are the costs of registering and obtaining compulsory third party (CTP) insurance over an electric scooter, that has been prescribed by a medical practitioner for aid in mobilisation, 'medical expenses' as defined in subsection 159P(4) of the Income Tax Assessment Act 1936 (ITAA 1936)?

Decision

Yes. The costs of registering and obtaining CTP insurance over an electric scooter, that has been prescribed by a medical practitioner for aid in mobilisation, are 'medical expenses' as defined in subsection 159P(4) of the ITAA 1936.

Facts

The taxpayer has difficulty in mobilising and has purchased an electric scooter to aid in mobilisation. The scooter is of a kind specifically designed for the disabled. The taxpayer has had the scooter registered with the relevant transport authority for on-road use. The taxpayer also obtained CTP insurance over the scooter.

The use of an electric scooter was prescribed by a legally qualified medical practitioner.

Reasons for Decision

Paragraph (f) of the definition of 'medical expenses' in subsection 159P(4) of the ITAA 1936 includes payments made in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner.

Taxation Ruling TR 93/34 explains the meaning of a 'medical or surgical appliance' as being an instrument, apparatus or device which is manufactured, distributed or generally recognised as an aid to the function or capacity of a person with a disability or an illness.

The electric scooter is therefore a medical appliance as it has been manufactured as, and is generally recognised as, an aid to those people who have a mobility impairment.

As the electric scooter is a medical or surgical appliance prescribed by a legally qualified medical practitioner, payments that are 'in respect of' the scooter will meet the definition of 'medical expenses'.

The courts have commented on the phrase 'in respect of' at various times and have found it to have a very wide meaning. Per Mann CJ in Trustees Executors & Agency Co. Ltd. v. Reilly [1941] VLR 110; [1941] ALR 105:

   The words 'in respect of' are difficult of definition but they have the widest possible meaning of any expression intended to convey some connection or relation between the subject matters to which the words refer.

In a Board of Review decision ( Case F25 74 ATC 130; (1974) 19 CTBR (NS) 288 Case 43 ) it was held that the phrase 'in respect of' was wide enough to cover maintenance and repair costs as well as the original cost of purchasing the medical or surgical appliance.

It is considered that the costs of registering the scooter for on-road use and obtaining CTP insurance over the scooter are maintenance costs. This is because registering and obtaining CTP insurance over the scooter are ongoing costs which are necessary to bring the scooter into a condition in which it can be legally used as it was designed to be, as an aid to mobility.

Therefore, it is considered that the costs of registering and obtaining CTP insurance over the electric scooter are 'medical expenses' as defined in subsection 159P(4) of the ITAA 1936. As such these costs can be added to the purchase price of the scooter, and all other medical expenses incurred during the income year, for the purpose of calculating the medical expenses tax offset in section 159P of the ITAA 1936.

Date of decision: 14 October 2003

Year of income:Year ended 30 June 2003

Legislative references:
Income Tax Assessment Act 1936
   section 159P
   subsection 159P(4)

Case references:
Trustees Executors & Agency Co. Ltd. v. Reilly
    [1941] VLR 110
    [1941] ALR 105

Case F25
   74 ATC 130

Case 43
   (1974) 19 CTBR (NS) 288

Related Public Rulings (including Determinations)
Taxation Ruling TR 93/34

Related ATO Interpretative Decisions
ATO ID 2001/629
ATO ID 2003/979

Keywords
Rebates
Medical expenses
Medical expenses rebates
Medical & surgical appliances

Siebel/TDMS reference number: 3715117;1-8EB6RVD

Business line: Small Business/Individual Taxpayers

Date of publication: 31 October 2003

ISSN: 1445-2782

ATO ID 2003/978 (Withdrawn) history   Top  
   Date   Version 
   14 October 2003   Original statement   
 You are here ®  11 August 2017   Withdrawn   


 


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