Medical Expenses Tax Offset

Medical Expenses Tax Offset

While you can't usually claim laser eye surgery from Medicare or your health fund, you may be able to claim a medical expenses tax offset to help recover your costs. Better still, you could claim your spouse's and other dependants' surgery too.

The following information is brought to you by Welch Porter Accountants and may be of benefit when costing your surgery. Please seek professional advice before making any decisions regarding your finances.

What is the Medical Expenses Tax Offset?

You may receive a tax offset on your gross payable tax bill if your "Net Medical Expenses" exceed $1,500.00. The Medical Expenses Tax Offset contributes 20% of the net medical expenses exceeding $1,500.00 with no upper limit.

What are "Net Medical Expenses"?

Your "Net Medical Expenses" are the total amount spent on medical expenses minus any reimbursements paid by:

• Health insurance claims
• Medicare claims
• Any claim under a general insurance policy.

Medical Expenses are clearly defined and may include elective surgery by a qualified medical practitioner. They do not include accommodation and travel to surgery, or funds benefit payments including the Medicare Levy.

Laser Eye Surgery

Laser eye surgery is regarded as elective surgery by Medicare and therefore no reimbursement available. These costs however, do qualify as medical expenses when claiming the medical expenses tax offset.

Medical Expenses Paid for Dependants

Medical expenses can include qualifying expenditure paid, not only in respect of yourself, but also in respect of your dependants. Your dependants must be Australian residents for tax purposes and are defined to include:

• Your spouse (legal or defacto);
• A child under 21 years;
• A person for whom you are entitled to a dependants rebate.

The Planning Tips

1. Keep all your receipts/invoice's for medical expenses as well as health fund and Medicare statements. It is sometimes staggering how much you have actually spent even after allowing for health fund and Medicare refunds.
2. For planned or elective medical treatment, try to arrange things so that all associated medical expenses are paid for within the one financial year. Remember the non-rebatable threshold applies each financial year.
3. Say you've had a high enough level of net medical expenses in the current financial year, to exceed the $1,500.00 threshold; 30 June is approaching and you have further medical treatment to undertake. If possible, pay the medical costs before 30 June. Even if the treatment is performed after 30 June, provided the medical expenses have been paid for prior 30 June, you can include them with all other medical expenses paid in that year.
4. The highest income-earner in the family (ie; the one in the highest tax bracket) should be the person paying for all medical expenses of themselves as well as their spouse and other dependants. As the non-rebatable threshold applies to each taxpayer, it is therefore best if all medical expenses can be attributed to one person to maximise the rebate and help minimise the overall tax being paid by the family as a whole.

IMPORTANT NOTE
This is not advice. Readers should not act solely on the basis of the material contained in this document. Items herein are general comments only and do not constitute or convey advice per se. Also, changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas covered herein. This document is provided exclusively to Laser Sight for their exclusive use as a helpful guide to their clients and for their clients' private information. Therefore, it should be regarded as confidential and not be made available to any person without our prior approval.

Welch Porter Accountants

Peter Welch
Level 4, 6-8 Underwood Street,

Greg Emerson
Sydney, NSW 2000, Australia P.O. Box R1376, Royal Exchange, NSW 1225

Consultant: Warren Porter

Telephone: (02) 9241 3773
Fax: (02) 9251 1008
E-mail: welpor@welchporter.com.au
Web: www.welchporter.com.au