Net Medical Expenses Tax Offset

The Net Medical expenses Tax Offset will continue to be available for out-of-pocket medical expenses relating to disability aids, attendant care or aged care until 1 July 2019.

However, for the rest, the net medical expenses tax offset ceased from 1 July 2013, with transitional arrangements for those currently claiming the offset. 

The transitional measures are as follows: 

• From 1 July 2013, those taxpayers who claimed the offset in 2012-2013 will continue to be eligible in 2013-2014 if they have eligible out-of-pocket medical expenses above the relevant thresholds.
  
  
• In addition, those who claim the offset in 2013-2014 will be eligible to claim it in 2014-2015.

For resident taxpayers with adjusted taxable income below the surcharge thresholds, the net medical expenses tax offset of 20% applies to net medical expenses above the annual threshold.  There is no upper limit to the amount you can claim.
 
From 1 July 2012, for people with adjusted taxable income above the Medicare levy surcharge thresholds, the offset threshold is increased, and the rate of reimbursement is reduced to 10% for eligible out of pocket expenses incurred.  (See Offset Thresholds below.)

Year	Below ATI Threshold	Above ATI Threshold	Thresholds*
			Single	Family
1 July 2018 to 30 June 2019	$2,377	$5,609	$90,000	$180,000
1 July 2017 to 30 June 2018	$2,333	$5,504	$90,000	$180,000
1 July 2016 to 30 June 2017	$2,299	$5,423	$90,000	$180,000
1 July 2015 to 30 June 2016	$2,265	$5,343	$90,000	$180,000
1 July 2014 to 30 June 2015	$2,218	$5,233	$90,000	$180,000
1 July 2013 to 30 June 2014	$2,162	$5,100	$88,000	$176,000
1 July 2012 to 30 June 2013	$2,120	$5,000	$84,000	$168,000
1 July 2011 to 30 June 2012	$2,060	n/a	n/a	n/a
1 July 2010 to 30 June 2011	$2,000	n/a	n/a	n/a
1 July 2005 to 30 June 2010	$1,500	n/a	n/a	n/a

*Plus $1,500 for each dependent child after the first.
For the current Medicare Levy Surcharge Thresholds refer to the link below.

Since the phased out changes from 1 July 2013

 You can only claim this offset if you had expenses that relate to disability aids, attendant care or aged care.

 

Disability aids are items of property manufactured as, or generally recognised to be, an aid to the functional capacity of a person with a disability but, generally, will not include ordinary household or commercial appliances.

 

Attendant care expenses relate to services and care provided to a person with certain disabilities to assist with everyday living, such as the provision of personal assistance, home nursing, home maintenance, and domestic services to a person who is blind or permanently confined to bed or a wheelchair.

 

Aged care expenses relate to services and accommodation provided by an approved aged care provider to a person who is a care recipient or continuing care recipient within the meaning of the Aged Care Act 1997.

 

Prior to the phased out changes from 1July 2013

Medical expenses which qualify for the tax offset included:

> expenses relating to an illness or operation paid to legally qualified doctors, nurses or chemists and public or private hospitals;

> 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

> 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 treatment that are solely cosmetic;

> therapeutic treatment 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 fund;

> purchases from a chemist that are not related to an illness or operation;

> life insurance medical examinations;

> ambulance charges and subscriptions; and

> funeral expenses.

Refer to the links below for further details.

 

You can include 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 and

> 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 services fees, and

> accommodation charges, periodic payments of accommodation bonds or amounts drawn from accommodation bonds paid as a lump sum.

 

The following are expenses which cannot be included:

> 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 or received an ACAT assessment showing that they require either low or high-level care)

> payments for people who have either been assessed as requiring level 8 care or who have not received an ACAT assessment showing that they require either low or high-level care.