Net expenses are your total eligible medical expenses minus refunds from Medicare, National Disability Insurance Scheme (NDIS) and private health insurers which you or someone else, received or are entitled to receive. This offset is income tested. If you are eligible for the offset, the percentage of net medical expenses you can claim is determined by your adjusted taxable income (ATI) and family status.
You can claim a tax offset of 10% or 20% of your net medical expenses over threshold. There is no upper limit on the amount you can claim.
The Net Medical Expenses Offset is being phased out over the period from 1 July 2013 to 30 June 2018.
Transitional arrangements allow claims for disability aids, attendant care or aged care expenses to be made until 30 June 2019.
- A claim can only be made in 2013-14 if a rebate had been received in 2012-13
- A (final) claim only can be made in 2014-15 if a rebate had been received* in 2013-14
- From 2015–16 until 2018–19, claims for this offset are restricted to net eligible expenses for disability aids, attendant care or aged care.
* “Received” means that a rebate amount greater than nil had been included in the tax assessment.
Medical expenses include payments:
- 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, and
- for treatment under an in-vitro fertilisation program.
Expenses which do not qualify as medical expenses include payments made for:
- cosmetic operations for which a Medicare benefit is not payable
- dental services or treatments that are solely cosmetic
- therapeutic treatment where the patient is 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 insurer
- purchases from a chemist that are not related to an illness or operation
- life insurance medical examinations
- ambulance charges and subscriptions, and
- funeral expenses.
Residential aged care expenses
You can include payments made to nursing homes or hostels (not retirement homes) for an approved care recipient’s permanent or respite care if the payments were:
- made to an approved care provider and
- for personal or nursing care, not just for accommodation.
An approved care recipient’s residential aged care payments usually include an amount for personal or nursing care if the recipient has an aged care assessment team (ACAT) assessment that they require either low or high-level care.
Residential aged care payments can be for:
- daily fees
- income tested daily fees
- extra service fees, and
- accommodation charges, periodic payments of accommodation bonds or amounts drawn from accommodation bonds paid as a lump sum.
The following are expenses which cannot be included:
- lump sum payments of accommodation bonds
- interest derived by care providers from the investment of accommodation bonds (because these are not payments for residential aged care)
- payments for people who were residents of a hostel before 1 October 1997 and who did not have a personal care subsidy or a respite care subsidy paid on their behalf at the personal care subsidy rate by the Commonwealth (unless they have subsequently been reassessed as requiring care at levels 1 to 7 or received an ACAT assessment showing that they require either low or high level care)
- payments for people who have either been assessed as requiring level 8 care or who have not received an ACAT assessment showing that they require either low or high level care.
| Adjusted Taxable
Income for rebates
|$84,000 or less||20% of net medical expenses over $2,120|
|above $84,000||10% of net medical expenses over $5,000|
|Family (2012-13)||$168,000* or less||20% of net medical expenses over $2,120|
|above $168,000*||10% of net medical expenses over $5,000|
|Single (2013-14) $88,000 or less 20% of net medical expenses over $2,162|
|above $88,000 10% of net medical expenses over $$5,100|
|Family (2013-14) $176,000 or less 20% of net medical expenses over $2,162|
|above $176,000 10% of net medical expenses over $$5,100|
|Single (2014-15) $90,000 or less 20% of net medical expenses over $2,218|
|above $90,000 10% of net medical expenses over $$5,233|
|Family (2014-15) $180,000 or less 20% of net medical expenses over $2,218|
|above $180,000 10% of net medical expenses over $$5,233|
|Single (2015-16) $90,000 or less 20% of net medical expenses over $2,265|
|above $90,000 10% of net medical expenses over $$5,343|
|Family (2014-15) $180,000 or less 20% of net medical expenses over $2,265|
above $180,000 10% of net medical expenses over $$5,343