20% Net Medical Expenses Tax Offset – 2011

If your net medical expenses exceed $2,000 for financial year ending 30th June 2011, then you may be eligible for a 20% tax offset for all amounts over the $2,000 threshhold.

Your net medical expenses is the balance that you have paid out of your pocket after health insurance and Medicare have contributed to the cost of the medical expense.

The Medical expenses used to claim the offset may be for yourself, your spouse (only 1 person per couple should make the claim otherwise 2 by $2,000 thresholds apply), children under 21 (including your adopted children, stepchildren, ex-nuptial children or children of your spouse) . Please note that other children may qualify, either contact your accountant or the Australian Taxation Office.

Medical expense that can be included as part of the tax offset need to be paid to legally qualified doctors, nurses or chemists and public or private hospitals.

To be eligible for the Medical Expense tax offset, payments need to be paid to the following medical professionals:-

  • 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 confined 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, and
  • for treatment under an in-vitro fertilisation program.

To be able to claim this tax offset you must be a resident of Australia for taxation purposes. Medical expenses while travelling overseas on holiday qualify as long as they are paid to a legally qualified professional in the above group.

Expenses which do not qualify as medical expenses 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, and
  • funeral expenses.