Issue
Does therapeutic treatment need to be at the direction of a legally qualified medical practitioner in order to be considered a medical expense as defined in subsection 159P(4) of the Income Tax Assessment Act 1936 (ITAA 1936)?
Decision
Yes, therapeutic treatment must be at the direction of a legally qualified medical practitioner in order to be considered a medical expense as defined in subsection 159P(4) of the ITAA 1936.
Reasons for Decision
Section 159P of the ITAA 1936 provides for a rebate (medical expenses tax offset) to a taxpayer whose net medical expenses in the year of income exceed the threshold dollar amount specified in the section. The amount of the tax offset is equal to 20% of the expenditure that exceeds the threshold amount.
Paragraph (d) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 provides that medical expenses include payments 'for therapeutic treatment administered by direction of a legally qualified medical practitioner ' (emphasis added).
It was held in Case A53 69 ATC 313; (1969) 15 CTBR (NS) Case 30 that the mere suggestion or recommendation by a medical practitioner that the patient undergoes therapeutic treatment is not sufficient for the payment to qualify as medical expenses. The patient would have to be referred by a medical practitioner to a particular person for specific treatment.
In the context of subsection 159P(4) of the ITAA 1936, therapeutic treatment involves the exercise of professional skill in the medical field in a way which normally involves the person administering the treatment using drugs or physical or mental processes of one kind or another for the purpose of curing or managing disease ( Case R95 84 ATC 633; (1984) 27 CTBR (NS) Case 148 ).
Furthermore, therapeutic treatment as a concept is concerned with healing or curing, rather than preventing the need for therapy ( Case T67 (1967) 18 TBRD 346; (1967) 14 CTBR (NS) Case 31 ). Although the treatment must be administered by direction of a legally qualified medical practitioner, the treatment need not be administered by such a practitioner.
Physiotherapy, massage, chiropractic treatment and osteopathy are common examples of therapeutic treatment.
Amendment History
Date of amendment Part Comment 29 November 2013 Decision,Reason for Decision, Legislative References, Keywords Amended for clarity and to correct legislative reference.
Date of amendment | Part | Comment
29 November 2013 | Decision,Reason for Decision, Legislative References, Keywords | Amended for clarity and to correct legislative reference.