Time to think medical

The Government announced in the recent Federal Budget that the threshold for claiming net medical expenses is set to increase from $1,500 to $2,000 as of 1 July 2010.

Net medical expenses are those medical expenses you have paid, less refunds from Medicare or your private health fund. Currently, you can claim a tax offset of 20% on the amount above the $1,500 for eligible family medical costs. These include: dentists, orthodontists, optometrists (including the cost of prescription spectacles or contact lenses), therapeutic treatment under the direction of a doctor, laser eye surgery, IVF etc. The ATO has a good summary of eligible medical expenses on their website at www.ato.gov.au.

The eligibility of a medical expense that can be included is determined by the date of payment. Therefore, with the rise of threshold level to $2,000 as from 1 July, you should consider the most appropriate timing of payment for medical expenses you are likely to incur close to the end of the financial year. A payment made on 30 June 2010 will be included in your 2010 calculation whereas a payment made on 1 July 2010 will be included in your 2011 calculation and therefore be subject to the higher threshold.

Published : 24 May 2010