Monday 26th August 2013

Net Medical Expenses Tax Offset Phase Out

  • Medical

From 1  July 2019, taxpayers will no longer be able to claim a tax offset for out-of-pocket medical expenses.  All claims from 1 July 2013 will be restricted to eligible taxpayers who incur  out-of-pocket medical expenses relating only to disability aids, attendant  care, or aged care expenses.

It’s now even harder

Historically,  eligible taxpayers could claim a Net Medical Expense Tax Offset (NMETO) for  certain out-of-pocket medical expenses.   This offset will be phased out completely with transitional arrangements  available to those currently claiming the offset. 

From 1  July 2013, only those who claimed NMETO in 2012-13 will be eligible to claim  NMETO in the 2013-14 income year.   Similarly, only those who claimed the NMETO in 2013-14 will be able to  claim it in the 2014-15 income year.   These offsets will apply to all medical expenses.

In  addition, the claim for all other taxpayers (ie those who did not claim the  NMETO in 2012-13) will be restricted to out-of-pocket medical expenses for  disability aids, attendant care, or aged care expenses, which exceed the  relevant thresholds.  There is no mention  of any change to the existing thresholds ($2120 for 2012-13) or 20 percent of the expense that can be claimed.

Source: BDO Federal Budget Report 2013

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