COVID-19 Update: Prioritising our clients' and associates' health
The net medical expenses tax offset is no longer be available from 1 July 2019.
From the 2014-15 income year until the end of the 2018-2019 income year, taxpayers can only claim the net medical expenses tax offset for medical expenses that both meet:
If your claim meets the new, restricted criteria, you may be entitled to claim a tax offset in the current financial year.
For the final year of this offset (2018-19), to determine the out of pocket amount you must deduct any amounts reimbursed to you from the total of the eligible expenses.
The Net Medical Expenses Tax Offset is subject to income testing. Taxpayers with an adjusted taxable income above $90,000 for singles or $180,000 for a couple or family will be affected. The family threshold increases by $1,500 for each dependent child after the first.
If your adjusted taxable income is above these thresholds, you can claim a reimbursement of 10% for qualifying net medical expenses incurred in excess of $5,609 (indexed annually).
Taxpayers with an adjusted taxable income below these thresholds can claim a reimbursement of 20% for qualifying net medical expenses over $2,377 (indexed annually) when they lodge their tax return.
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.
The medical expenses must be for:
Eligible expenses include payments:
Residential aged care expenses and payments for in-home care must have been made to an approved care provider for personal or nursing care and accommodation in respect of an approved care recipient.
An approved care recipient is a person who has been assessed by the aged care assessment team (ACAT) as eligible for residential aged care or in-home aged care.
Residential aged care payments can be for:
Expenses which do not qualify as aged care medical expenses:
A disability aid for the purpose of this offset is an instrument, apparatus or device generally recognised to be an aid to the function or capacity of a person with a disability. A disability aid will improve a person's quality of life.
The purchase of a wheelchair or the maintenance of a guide dog are examples of disability aids as they help a person’s daily living activities, provide assistance to alleviate the effect of the disability and enable increased participation in society.
A disability is defined as a restriction or impairment which has lasted or is likely to last, for a period of six months or more, and which restrict a person's every day activities. Such as:
What records do you need to keep?
This information sheet is intended as a guide for H&R Block clients. All actual detail and circumstances differ, please discuss your situation with a H&R Block Tax Consultant. Use one of our Taxsaver envelopes to keep all your receipts and documents for the year. Remember – if you are not sure if you can claim an expense, keep the receipt and we will ensure that we claim all allowable deductions and rebates for you whilst preparing your tax return. H&R Block is Australia’s largest network of tax accountants with over 470 offices. Every year we help thousands of Australians achieve a better taxation result. For your nearest office call 13 23 25.
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