Medical expenses tax offset

Are a mattress replacement system and recline lift chair medical or surgical appliances for the purposes of the medical expenses tax offset (also referred to as a 'rebate') under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936)?

No, the mattress replacement system and recline lift chair are not medical or surgical appliances for the purposes of the medical expenses tax offset under section 159P of the ITAA 1936.

The taxpayer suffers from very poor circulation and limited movement, which are symptoms of a serious medical condition. The taxpayer is hospitalised as a result of complications associated with the medical condition, and during the period of hospitalisation, the taxpayer experiences severe bed sores.

As part of the healing process overseen by the medical practitioner responsible for the taxpayer's treatment, an air flotation mattress is installed in the hospital for the taxpayer's use. The air flotation mattress is designed to prevent bed sores by alleviating pressure and stimulating circulation.

Upon the taxpayer's release from hospital, the medical practitioner responsible for the taxpayer's treatment recommends that the taxpayer purchase an air flotation mattress in order to prevent the bed sores recurring.

The medical practitioner also recommends that the taxpayer obtain an electronic recline lift chair to enable the taxpayer to sit upright.

Subsection 159P(1) of the ITAA 1936 states, inter alia , that an amount paid by a taxpayer in the year of income as medical expenses less any amount paid to the taxpayer in respect of those medical expenses shall be treated as a rebatable amount in respect of that year of income. 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' for the purposes of paragraph (f) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 as an instrument, apparatus or device which is manufactured as, distributed as or generally recognised to be an aid to the function or capacity of a person with a disability or an illness.

To be an aid to function or capacity, the item must help the person with the illness or disability perform the activities of daily living: paragraph 4 of TR 93/34. The mere fact that an item gives therapeutic treatment, such as relieving, healing or preventing a medical condition, does not make it a 'medical or surgical appliance'.

In this case, the air flotation mattress, which is a mattress replacement system, is clearly used in therapeutic treatment. However, the mattress does not help the taxpayer perform everyday activities as it does not aid the taxpayer's physical movement. Similarly, although the recline lift chair provides comfort and relieves the taxpayer's pain, the chair is not generally recognised as assisting the taxpayer in performing any activities. Accordingly, the mattress replacement system and the recline lift chair are not considered to be aids to function or capacity, and therefore, are not 'medical or surgical appliances' for the purposes of paragraph (f) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936.

Date of amendment Part Comment 22 November 2013 Reasons for Decision Amended for clarity. Legislative References Removed reference. Related ATO Interpretative Decisions Amended to remove reference to withdrawn ATOID. Keywords updated.

Date of amendment | Part | Comment

22 November 2013 | Reasons for Decision | Amended for clarity.

Legislative References | Removed reference.

Related ATO Interpretative Decisions | Amended to remove reference to withdrawn ATOID.

Keywords | updated.