Net Medical Expenses Tax Offset

Over the past few weeks we have been getting quite a few queries regarding the medical expenses which can be claimed in individual tax returns under the net medical expenses tax offset. Due to the number of queries we have decided to post a few details regarding the available offset.

Net medical expenses are the medical expenses you have paid less any refunds you got, or could get, from Medicare or your private health fund.

You can claim a tax offset of 20% – 20 cents in the dollar – of your net medical expenses over $1,500. There is no upper limit on the amount you can claim.

You can claim expenses relating to most illnesses or operations paid to legally qualified doctors, nurses and chemists, and to public or private hospitals.

The medical expenses claimed can be for you, your spouse or any of your dependents.

Medical expenses which qualify for the tax offset also include payments:

• to dentists, orthodontists or registered dental mechanics
• to opticians or optometrists, including for the cost of prescription spectacles or contact lenses
• to a carer who looks after a person who is blind or permanently confined to a bed or wheelchair
• for therapeutic treatment under the direction of a doctor
• for medical aids prescribed by a doctor
• for artificial limbs or eyes and hearing aids
• for maintaining a properly trained dog for guiding or assisting people with a disability (but not for social therapy)
• for laser eye surgery, and
• for treatment under an in-vitro fertilisation program.

Expenses which do not qualify for the tax offset include payments made for:

• cosmetic operations for which a Medicare benefit is not payable
• dental services or treatment that are solely cosmetic
• therapeutic treatment where the patient is not formally 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
• inoculations for overseas travel
• non-prescribed vitamins or health foods
• travel or accommodation expenses associated with medical treatment
• contributions to a private health insurer
• purchases from a chemist that are not related to an illness or operation
• life insurance medical examinations
• ambulance charges and subscriptions, and
• funeral expenses.

Further information can be found on the following website:

http://www.ato.gov.au/individuals/content.asp?doc=/content/19181.htm