Medical expenses: tax offset - payments for domestic services

Do payments for the provision of domestic services qualify as medical expenses for the purposes of the medical expenses tax offset under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936)?

No. Payments for domestic services do not qualify as medical expenses for the purposes of the medical expenses tax offset under section 159P of the ITAA 1936.

The taxpayer's spouse is an Australian resident and is ill and visually impaired.

The taxpayer pays an entity for the provision of some domestic services. These services enable the taxpayer and the taxpayer's spouse to continue living at home.

The domestic services provided are house cleaning, home and garden maintenance.

A medical expense tax offset is available to a taxpayer under section 159P of the ITAA 1936 where the taxpayer pays medical expenses for themselves or a dependant who is an Australian resident.

Paragraph (h) of the definition of the term 'medical expenses' in subsection 159P(4) of the ITAA 1936 describes medical expenses 'as remuneration of a person for services rendered by him as an attendant of a person who is blind or permanently confined to a bed or an invalid chair'.

The term 'attendant' is not defined in the ITAA 1936 or the Income Tax Assessment Act 1997 (ITAA 1997). Accordingly, it will have its ordinary meaning, having regard to the purpose and context of the provisions in which it appears: Chaudhri v. Federal Commissioner of Taxation [2001] FCA 554; 2001 ATC 4214; (2001) 47 ATR 126. The Macquarie Dictionary , 2005, 4th edition, The Macquarie Library Pty Ltd., (NSW), relevantly defines an attendant 'as someone who provides personal support and physical assistance for a person with a physical disability'.

In this context, the requirement that the services be provided 'as an attendant' of a person necessitates that the services are primarily to support and assist the person, who is blind or permanently confined to a bed or an invalid chair, while they perform functions that they can with that support and assistance. The phrase 'as an attendant' in subparagraph (h) defines the relevant services as those necessitated by or founded in the disability: that is, not just services rendered to the person with a disability but services rendered to the person because they are disabled.

Payments for services that are domestic services (such as house cleaning, home and garden maintenance services) fall outside the scope of paragraph 159P(4)(h) of the ITAA 1936 when the services cannot also be said to be rendered to a permanently confined taxpayer as services that address the permanently confined taxpayer's disability.

The services that fall within paragraph 159P(4)(h) of the ITAA 1936 are first rendered by an attendant - in guiding and assisting the disabled person in doing what the disabled person is doing (that is, in this case, doing the house cleaning, home and garden maintenance) - and second are necessitated by the disability of the person who is thereby supported or assisted.

The taxpayer pays an entity for house cleaning, home and garden maintenance services to be carried out. The persons carrying out the domestic services do not support or assist the taxpayer's spouse to perform those activities.

Accordingly, the payments made by the taxpayer to the entity in respect of the provision of domestic services do not qualify as payments of medical expenses for the purposes of the medical expenses tax offset under section 159P of the ITAA 1936. [Note : in the circumstances of this case it was not necessary to consider whether the taxpayer's spouse was 'blind' for the purposes of paragraph 159P(4)(h) of the ITAA 1936.]