Net Medical Expense Offset Gone… kind of

The Government has released some draft legislation and explanatory materials to phase-out the net medical expenses tax offset (http://www.treasury.gov.au/ConsultationsandReviews/Consultations/2013/phase-out-net-medical-expenses). I love the way they call it a phase out when the vast majority of people lost all eligibility on 1 July 2013. SO this is their idea of a phase out…

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First, “From the 2013-14 income year until the end of the 2018-19 income year taxpayers can only claim the NMETO for medical expenses that both meet the current definition and eligibility requirements and relate to disability aids, attendant care or aged care.” the reason for 2018/19 is that the National Disability Insurance scheme will be fully operational. NOT LIKELY. Julia Gillard still claims she started this scheme, a scheme which will cost between $8-14 billion a year in todays terms when fully operational but she could only find $1 billion over 4 years in her last budget. Yes it would be wonderful to have but to achieve it we only need to halve or defence spend every year, or tax everyone on the gains on their houses… Never going to happen.

Second, and the one you care more about is that “For the 2013-14 income year and 2014-15 income year, taxpayers will be eligible to claim the full range of medical expenses (as defined currently) but only if they have received an amount of the NMETO in the previous income year (or in both 2012-13 and 2013-14 in respect to claims in the 2014-15 income year).” So when you prepare my 2012/13 return in May next year, even if I can only get to $2,121 of unreimbursed medical expenses, saving me a mere 20 cents in tax, make sure I make the claim for the net medical expense tax offset, as who knows what my unreimbursed expenses might be in the 2013/14 year.

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About Ken Mansell

As a stay at home Dad most of the week this is my way of pretending I am still the tax counsel of ASX and SEC listed companies, working at big 4 firms, working at the Federal Treasury, on the Henry Review and at Parliament House for the previous government.
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