ATO Interpretative Decision
ATO ID 2003/979 (Withdrawn)
Medical Expenses Tax Offset: insurance on electric scooter
FOI status: may be released
||This ATO ID is withdrawn.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).
||This document has changed over time. View its history.
Status of this decision: Decision withdrawn 11 August 2017.
|CAUTION: 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.|
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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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.
Are the costs of obtaining general 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)?
No. The costs of obtaining general insurance over an electric scooter, that has been prescribed by a medical practitioner for aid in mobilisation, are not 'medical expenses' as defined in subsection 159P(4) of the ITAA 1936.
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 also had the scooter registered with the relevant transport authority for on-road use and has taken out a general insurance policy 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 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  VLR 110;  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.
Although the courts have held the phrase 'in respect of' to have a wide meaning there still needs to be a sufficient connection between the payment and the use of the medical or surgical appliance. In a Board of Review decision ( Case R12 84 ATC 165; (1984) 27 CTBR (NS) 535 Case 63 ) it was held that the phrase 'in respect of' was not wide enough to cover travelling expenses incurred in order to have a medical or surgical appliance fitted.
It is considered that the phrase 'in respect of' does not include the costs of obtaining general insurance over a medical or surgical appliance such as the scooter. This is because a general insurance policy over the scooter is not necessary in order for the scooter to be used as designed as an aid to mobility. The costs of obtaining the insurance were incurred in order to protect against loss rather than to bring the scooter into a condition where it could be used as a medical appliance.
Therefore, the costs of obtaining general insurance over the scooter are not 'medical expenses' as defined in subsection 159P(4) of the ITAA 1936 and the cost of the general insurance cannot be taken into account in 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|
Income Tax Assessment Act 1936
84 ATC 165
(1984) 27 CTBR (NS) 535
Trustees Executors & Agency Co. Ltd. v. Reilly
 VLR 110
 ALR 105
Related Public Rulings (including Determinations)
Taxation Ruling TR 93/34
Related ATO Interpretative Decisions
ATO ID 2001/629
ATO ID 2003/978
Medical expenses rebates
Medical & surgical appliances
Siebel/TDMS reference number: 3715117;1-8EBEAZ0
Business line: Small Business/Individual Taxpayers
Date of publication: 31 October 2003
|ATO ID 2003/979 (Withdrawn) history