Did you have net medical expenses
over $2,000 in 2010–11?
Medical expenses do not include contributions to a private health insurer, travel or accommodation expenses associated with medical treatment, or inoculations for overseas travel.
You Need To Know
Net medical expenses are the medical expenses you have paid less any refunds you got, or could get, from Medicare or a private health insurer.
You can claim a tax offset of 20% – 20 cents in the dollar – of your net medical expenses over $2,000. There is no upper limit on the amount you can claim.
Note
You can only claim medical expenses for those of your dependants who were Australian Residents for tax purposes.
The medical expenses must be for
- you.
- your spouse – married or de facto – regardless of their income.
- your children who were aged under 21 years, including adopted and stepchildren, regardless of their income.
- any other child aged under 21 years – not a student – whom you maintained and whose separate net income (SNI) was less than $1,786 for the first child and less than $1,410 for the second child and any subsequent children.
- a student aged under 25 years whom you maintained and whose SNI was less than $1,786.
- a child-housekeeper, but only if you can claim a tax offset for them on your tax return.
- an invalid relative, parent or spouse’s parent, but only if you can claim a dependant tax offset.
You and your dependants must be Australian residents for tax purposes, but you can claim medical expenses paid while travelling overseas. You may also be able to include the medical expenses of certain dependants who are waiting to migrate to Australia.
You can claim expenses relating to an illness or operation paid to legally qualifi ed doctors, nurses or chemists and public or private hospitals. However, expenses for some cosmetic operations are excluded.
Medical expenses which qualify for the tax offset also include payments
- to dentists, orthodontists or registered dental mechanics.
- to opticians or optometrists, including for the cost of prescription spectacles or contact lenses.
- to a carer who looks after a person who is blind or permanently confi ned to a bed or wheelchair.
- for therapeutic treatment under the direction of a doctor.
- for medical aids prescribed by a doctor.
- for artificial limbs or eyes and hearing aids.
- for maintaining a properly trained dog for guiding or assisting people with a disability (but not for social therapy).
- for laser eye surgery.
- for treatment under an in-vitro fertilisation program.
Expenses which do not qualify for the tax offset include payments made for
- cosmetic operations for which a Medicare benefit is not payable.
- dental services or treatments that are solely cosmetic.
- therapeutic treatment where the patient is not formally referred by a doctor – a mere suggestion or recommendation by a doctor to the patient is not enough for the treatment to qualify; the patient must be referred to a particular person for specific treatment.
- chemist-type items – such as tablets for pain relief – purchased in retail outlets or health food stores.
- inoculations for overseas travel.
- non-prescribed vitamins or health foods.
- travel or accommodation expenses associated with medical treatment.
- contributions to a private health insurer.
- purchases from a chemist that are not related to an illness or operation.
- life insurance medical examinations.
- ambulance charges and subscriptions.
- funeral expenses.
Residential aged care expenses
You can claim payments made to nursing homes or hostels (not retirement homes) for an approved care recipient’s permanent or respite care if the payments were
- made to an approved care provider.
- for personal or nursing care, not just for accommodation. An approved care recipient’s residential aged care payments usually include an amount for personal or nursing care if the recipient has an aged care assessment team (ACAT) assessment that they require either low- or high-level care.
Residential aged care payments can be for
- daily fees.
- income tested daily fees.
- extra service fees.
- accommodation charges, periodic payments of accommodation bonds or amounts drawn from accommodation bonds paid as a lump sum.
The tax offset does not cover the following payments
- lump sum payments of accommodation bonds.
- interest derived by care providers from the investment of accommodation bonds (because these are not payments for residential aged care).
- payments for people who were residents of a hostel before 1 October 1997 and who did not have a personal care subsidy or a respite care subsidy paid on their behalf at the personal care subsidy rate by the Commonwealth (unless they have subsequently been reassessed as requiring care at levels 1 to 7).
- payments for people assessed as requiring level 8 care.
What You WILL Need
- Details of the medical expenses you can claim.
- Details of refunds you received, or are entitled to receive, from Medicare or a private health insurer.
To help you work out what you can claim for medical expenses you paid in 2010–11, you can ask for an itemised statement from
- Medicare.
- your private health insurer.
- chemists where you had prescriptions filled.
Some of the items shown on these statements may not qualify for the tax offset. You will need to exclude these items from your claim.
About The Author
Warren Kruger is an Australian Tax Specialist and Advisor.
For a FREE Report “7 Essential Strategies to Reduce Your Taxation NOW!”,
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Warren Kruger is an Australian Tax Specialist and Advisor. For a FREE Report “7 Essential Strategies to Reduce Your Taxation NOW!”,enter your name and email address in the Opt In Box located on the top right hand side of this article.
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