Issue
Do expenses incurred by a taxpayer in purchasing a modified car capable of carrying a passenger seated in a wheelchair 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')?
Decision
No. The expenses incurred by a taxpayer in purchasing a modified car capable of carrying a passenger seated in a wheelchair do not qualify as medical expenses for the purposes of claiming the medical expenses offset under section 159P of the ITAA 1936.
Facts
The taxpayer suffers from a medical condition that affects their ability to walk.
The taxpayer's doctor recommended the use of a modified car for their transport needs.
The taxpayer purchased a modified car that is capable of carrying a passenger seated in a wheelchair.
The car's modifications do not enable the taxpayer to drive the car.
Reasons for Decision
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 which 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 the character of the appliance, not the purpose for which it is prescribed or used.
The modified car is a means of private transport and it retains its character as a passenger vehicle. While it allows the taxpayer to travel in their wheelchair in more comfort, safety and at their convenience it does not replace or alleviate an absent or impaired bodily function. It is not an aid to function and capacity within the meaning of a medical or surgical appliance.
The character of the modified car is not altered by the fact that its purchase was recommended by a legally qualified medical practitioner.
Consequently, the expenses incurred by the taxpayer in purchasing the modified car do not qualify as medical expenses for the purposes of section 159P of the ITAA 1936.