Medical Expenses Offset 2009-10

The Tax Office reported earlier in the year that many people are still not taking advantage of a large number of rebates. One of the most common areas people fail to take advantage is the medical expenses tax offset.

You can claim medical expenses for yourself and/or your dependants who are Australian residents for tax purposes.

The offset kicks in once your net medical expenses exceed the threshold amount of $1,500. You can claim 20 cents of every dollar above $1,500.

Net medical expenses refers to the actual out-of-pocket dollar amount (you need to deduct any refunds your received from Medicare or a private health provider).

Medical expenses can include things like visits to your doctor, hospital, optical, dental, referred physio, prescription medication and even some counselling services. It does not include such things as cosmetic procedures or travel expenses associated with medical treatment. If you are unsure if an expense qualifies contact your tax agent who can advise you.
 

Description Offset
Allowable medical expenses 20% of every $1 over $1,500

Update:

From the next financial year, families now have to generate $2,000 in out-of-pocket medical in order to qualify for the 20% rebate. The threshold is rising from $1,500 to $2,000.

Example

Henry and his wife have two young children. Between the four of them, they had $2,500 in out-of-pocket medical expenses for the year. When Henry puts in his tax return, he claims a $200 medical expenses tax offset. This represents 20 cents in each dollar above the threshold: ($2,500 – $1,500) x 20%.

Online Calculator

The Taxation Office have a Net Medical Expenses Tax Offset Calculator available online. The calculator can help you work out whether you are above the threshold and the amount of medical tax offset you can claim.

More information

For more information on the net medical expenses tax offset, including a detailed list of both claimable and non-claimable expenses, see the Tax Office Medical Expenses Tax Offset web page.

This information is for guidance only and is not intended as specific advice to any reader. Professional advice should be obtained before acting on any information contained herein. The publisher accepts no responsibility for loss occasioned to any person or organisation as a result of action or the refrain of action as a consequence of the contents of this publication.