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Do expenses incurred by a taxpayer in relation to purchasing a word prediction program and a voice synthesiser qualify as medical expenses for the purposes of claiming the medical expenses offset under section 159P of the Income Tax Assessment Act 1936 ('ITAA 1936')?

Yes. Expenses incurred by a taxpayer in relation to purchasing a word prediction program and a voice synthesiser qualify as medical expenses for the purposes of claiming the medical expenses offset under section 159P of the ITAA 1936.

The taxpayer suffers from a medical condition that affects their ability to communicate.

The taxpayer's doctor recommended the use of various items to meet their communication needs.

The taxpayer purchased a word prediction program and a voice synthesiser to enable them to use a notebook computer, MS Windows and MS Office Professional.

The word prediction program and the voice synthesiser are designed, manufactured and marketed as an aid to assist people with severe disabilities to communicate.

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 $1250.

The medical expenses must be paid by the taxpayer in respect of themselves or their dependant.

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.

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

Taxation Ruling TR 93/34 also provides that generally, a household or commercial appliance is not a 'medical or surgical appliance' and that we need to look at character of the appliance, not the purpose for which it is prescribed or used.

The word prediction program and voice synthesiser are developed, manufactured and marketed as an aid to assist people with severe disabilities. They are an 'aid to function or capacity' in that they enable a person with a physical or learning disability to use a computer and associated software. Therefore, the items meet the description of medical and surgical appliances.

A legally qualified medical practitioner recommended the purchase and use of the word prediction program and voice synthesiser. For the purposes of paragraph 159P(4)(f) of the ITAA 1936 they have been prescribed by a legally qualified medical practitioner.

The costs incurred by the taxpayer in purchasing the word prediction program and voice synthesiser therefore qualify as medical expenses for the purpose of calculating the medical expenses tax offset under section 159P of the ITAA 1936.