Medical expenses tax offset - therapeutic treatment - course of study at a university

Is undertaking a University course for rehabilitation purposes on the recommendation of a qualified medical practitioner, considered 'therapeutic treatment' for the purposes of claiming a medical expense tax offset under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936)?

No, undertaking a University course for rehabilitation purposes on the recommendation of a qualified medical practitioner, is not considered 'therapeutic treatment' for the purposes of claiming a medical expense tax offset under section 159P of the ITAA 1936.

The taxpayer receives treatment for a psychiatric illness.

A qualified medical practitioner recommended that the taxpayer undertake a course of university study as part of their rehabilitation.

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.

Paragraph (d) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 includes therapeutic treatment administered by direction of a legally qualified medical practitioner.

In order to qualify for the tax offset such payments must meet the following conditions: (1) they are for therapeutic treatment; and (2) the treatment is administered by the direction of a legally qualified medical practitioner.

The general concept of therapeutic treatment is healing or curing rather than preventing the need for therapy ( Case S2 85 ATC 102; (1985) 28 CTBR (NS) Case 8 ).

In Case R95 84 ATC 633; (1984) 27 CTBR (NS) Case 148, the Administrative Appeals Tribunal found that 'therapeutic treatment' necessitated the exercise of professional skill in the medical field. This would normally involve the person administering the treatment using chemical agents or drugs or some physical and mental processes which are directed towards the cure or management of a disease or ailment.

Undertaking a university course of study does not involve any healing or curing, nor is it treatment administered by a person exercising skill in the medical field.

In addition, a mere suggestion or recommendation by a doctor to a patient that the patient undergo therapeutic treatment is not enough for the associated expenses to qualify as medical expenses. The patient must be referred to a particular person for the therapeutic treatment ( Case A53 69 ATC 313; (1969) 15 CTBR (NS) Case 30 ).

The recommendation by the medical practitioner does not meet the requirement that the taxpayer be referred to a particular person for the therapeutic treatment. The expenses incurred in undertaking the university course of study do not meet either of the required criteria and therefore do not qualify as medical expenses for the purposes of the medical expenses tax offset under section 159P of the ITAA 1936.