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ATO Interpretative Decision

ATO ID 2006/252 (Withdrawn)

Income Tax
Medical Expenses Tax Offset: medical and surgical appliance - speech aid

Attention This ATO ID is withdrawn.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Status of this decision: Decision withdrawn 11 August 2017.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Do expenses incurred by a taxpayer for the purchase, repair and maintenance of a speech aid qualify as medical expenses for the purposes of subsection 159P(4) of the Income Tax Assessment Act 1936 (ITAA 1936)?

Decision

Yes. Expenses incurred by a taxpayer in relation to the purchase, repair and maintenance of a speech aid qualify as medical expenses for the purposes of subsection 159P(4) of the ITAA 1936.

Facts

The taxpayer is a resident of Australia.

The taxpayer underwent an operation as a result of which they became completely mute.

The taxpayer incurred expenses in acquiring a speech aid, repairing it, and purchasing batteries and spare parts.

The speech aid was prescribed by a legally qualified medical practitioner.

Reasons for Decision

Subsection 159P(3A) of the ITAA 1936 provides that a tax offset is allowable to a taxpayer whose net medical expenses in the year of income exceed $1,500.

The term 'medical expenses' is defined in paragraph 159P(4)(f) of the ITAA 1936 to include payments in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner.

The Commissioner's view on what constitutes a 'medical or surgical appliance' is set out in Taxation Ruling TR 93/34.

Paragraph 3 of TR 93/34 states that a 'medical or surgical appliance' is:

   ...an instrument, apparatus or device which is:

(a)
 manufactured as; or
(b)
 distributed as; or
(c)
 generally recognised to be

   an aid to the function or capacity of a person with a disability or illness.

Paragraph 17 of TR 93/34 states that 'function or capacity includes the ability to perform activities of daily living.'

The speech aid is an instrument, apparatus or device manufactured, distributed and generally recognised to be an aid to the taxpayer's ability to perform an activity of daily living, that is, the activity of speaking.

As such, the speech aid is a medical or surgical appliance. As the speech aid has been prescribed by a legally qualified medical practitioner its purchase is a medical expense for the purposes of subsection 159P(4) of the ITAA 1936.

Expenses incurred in repairing the speech aid, and purchasing batteries and spare parts are considered to have been paid 'in respect of' a medical or surgical appliance prescribed by a legally qualified medical practitioner and, therefore, are also medical expenses for the purposes of subsection 159P(4) of the ITAA 1936 ( Case F25 74 ATC 130; (1974) 19 CTBR (NS) Case 43 ).

Therefore, the expenses incurred by the taxpayer in relation to the purchase, repair and maintenance of the speech aid qualify as medical expenses for the purposes of subsection 159P(4) of the ITAA 1936.

Date of decision: 4 September 2006

Year of income:Year ended 30 June 2005

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

Case references:
Case F25
   74 ATC 130

Case 43
   (1974) 19 CTBR (NS) 288

Related Public Rulings (including Determinations)
TR 93/34

Related ATO Interpretative Decisions
ATO ID 2001/185

Keywords
Medical expenses rebate
Rebates and offsets

Siebel/TDMS reference number: 4757374;1-8EBEBJ9

Business line: Small Business/Individual Taxpayers

Date of publication: 8 September 2006

ISSN: 1445-2782

ATO ID 2006/252 (Withdrawn) history   Top  
   Date   Version 
    4 September 2006   Original statement   
 You are here ®  11 August 2017   Withdrawn   


 


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