From 1 July 2012, for people with adjusted taxable income above the Medicare levy surcharge thresholds, the offset threshold is to be increased to $5,000 (indexed annually thereafter) and the rate of reimbursement will be reduced to 10% for eligible out of pocket expenses incurred.

 

Taxpayers with adjusted taxable income below the surcharge thresholds will be unaffected by this measure.

 

For the current Medicare Levy Surcharge Thresholds refer to the link below.

 

From 1 July 2012, for people with adjusted taxable income above the Medicare levy surcharge thresholds, the offset threshold is to be increased to $5,000 (indexed annually thereafter) and the rate of reimbursement will be reduced to 10% for eligible out of pocket expenses incurred.

 

Taxpayers with adjusted taxable income below the surcharge thresholds will be unaffected by this measure.

 

For the current Medicare Levy Surcharge Thresholds refer to the link below.

 

From 1 July 2010 to 30 June 2012

 

The net medical expenses tax offset of 20% applies to net medical expenses above a threshold of $2,000. The threshold will be indexed to the Consumer Price Index, starting on 1 July 2011. There is no upper limit to the amount you can claim.

 

From 1 July 2005 to 30 June 2010

 

The net medical expenses tax offset of 20% applied to net medical expenses above a threshold of $1,500.  

 

‘Your net medical expenses’ are the medical expenses you have paid, less any refunds you have received or could receive from Medicare or a private health fund.

 

The medical expenses must be for:

 

> you;

 

> your spouse (married or de facto) regardless of their income;

 

> your children who were aged under 21 years, including adopted and stepchildren, regardless of their income;

 

> any other child aged under 21 years (not a student) who you maintained and whose Adjusted taxable income (ATI*) was less than $1,786 for the first child and less than $1,410 for the second child and any subsequent children;  

 

> a student aged under 25 years who you maintained and whose ATI* was less than $1,786;

 

> a child-housekeeper but only if you can claim a tax offset for them;

 

> an invalid relative, parent or spouse’s parent but only if you can claim a dependant tax offset.

 

You and your dependants must be Australian residents for tax purposes but you can claim medical expenses paid while travelling overseas.

 

*Prior to 1 July 2009 the child income threshold measure was separate net income (SNI). 

 

‘Your net medical expenses’ are the medical expenses you have paid, less any refunds you have received or could receive from Medicare or a private health fund.

 

The medical expenses must be for:

 

> you;

 

> your spouse (married or de facto) regardless of their income;

 

> your children who were aged under 21 years, including adopted and stepchildren, regardless of their income;

 

> any other child aged under 21 years (not a student) who you maintained and whose Adjusted taxable income (ATI*) was less than $1,786 for the first child and less than $1,410 for the second child and any subsequent children;  

 

> a student aged under 25 years who you maintained and whose ATI* was less than $1,786;

 

> a child-housekeeper but only if you can claim a tax offset for them;

 

> an invalid relative, parent or spouse’s parent but only if you can claim a dependant tax offset.

 

You and your dependants must be Australian residents for tax purposes but you can claim medical expenses paid while travelling overseas.

 

*Prior to 1 July 2009 the child income threshold measure was separate net income (SNI). 

 

Medical expenses which qualify for the tax offset include:

 

> 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. 

 

Medical expenses which qualify for the tax offset include:

 

> 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. 

 

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