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Jul 10 2013

Medical Tax Offset

Medical Tax Offset

The Net Medical Expense Tax Offset (NMETO) is to be phased out, and only the taxpayers who claim the offset for the 2012-2013 income year will be eligible to claim in future years. By 2019 this will be fully removed.

Transitional arrangements will allow taxpayers who incur medical costs for disability aids, attendant care or aged care expenses, to continue to claim the NMETO until 1 July 2019  www.aph.gov.au

If you spend more than a certain amount in one year, on ELIGIBLE medical expenses, you are able to get a Tax Offset from the Australian Tax Office (ATO) of 20% of the amount spent above that threshold figure.

The threshold figure for the 2011-12 tax year increased to $5,000.

The threshold figure for the 2011-12 tax year increased to $2,060.

The threshold figure for the 2010-11 tax year increased to $2,000.

The threshold figure for the 2008-09 and 2009-10 tax years was $1,500.

Therefore a couple of basic calculation to explain this are as follows:

  • Total spend on eligible Medical expenses is $2,000
    • 2009-10 = That figure is $500 above the $1,500 threshold. You get 20% of that $500 = $100.
    • 2010-11 = No rebate as the figure is not above the threshold.
  • Total spend on eligible Medical expenses is $5,000
    • 2009-10 That figure is $3,500 above the $1,500 threshold. You get 20% of that $3,500 = $700.
    • 2010-11 That figure is $3,000 above the $2,000 threshold. You get 20% of that $3,000 = $600.
Who can claim the Medical Tax Offset

Any person that is Tax resident in Australia can claim for themselves, their spouse and children under 21.

Further details at the ATO page in the Links section below.

What is eligible under the Medical Tax Offset

Any out of pocket medical expenses payable to legally qualifed Doctors, relating to an illness or operation, or associated items such as:

  • Dentists
  • Orthodontists
  • Opticians
  • Prescription glasses
  • Contact lenses

These expenses do NOT have to be made in Australia, as you can also claim medical expenses paid whilst travelling overseas.

Expenses for cosmetic operations may not be covered under this scheme.

Some expenses which do not qualify for the tax offset :

  • chemist-type items such as tablets for pain relief purchased in retail outlets or health food stores
  • non-prescribed vitamins or health foods
  • purchases from a chemist that are not related to an illness or operation

Further details at the ATO page in the Links section below.

Links

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