medical-expensesLast Chance To Claim…

Medical Expenses

Since 2013 there has been a progressive pulling-back of the ability to claim a tax off-set for medical expenses.

From 1 July 2012 (2013 tax year) your eligibility to claim on medical expenses became limited by your income level.

For 2014, you could only claim your medical expenses if you had claimed in 2013. For 2015 you can only claim if you had claimed in both 2013 and 2014. From 2016 no claim can be made for medical expenses, except for those relating to disability aids, attendant or aged care, which also cease after 2020.

The message for now is, if there are medical expenses you need to incur (for yourself or your family), do it before, rather than after, 30th June 2015 as this will be the last chance most of us have to claim a tax off-set where:

  • If your income is below $88,000 (single) or $176,000 (family) and the net medical expenses exceed $2,218, you will be able to claim 20% rebate of the excess;
  • If your income is above these limits, you will be able to claim a rebate of 10% on net medical over $5,233.

It is the date the payment is made that counts, rather than when the service was rendered, so paying for a service (e.g. dental braces) that will be supplied after 30th June, will bring the expenditure into the 2015 claim year.

But a word of caution: “medical expenses” for the purposes of the tax off-set has a narrower meaning than most would think. It primarily relates to payments to medical doctors, optometrists and dentists. There are others, but these are the main ones. Payments to most other health providers do not qualify as medical expenses, though there is a process to bring them into it. If you have any questions about this surprisingly tricky little area of tax, please give us a call or get in touch via our Contact page.