20% Medical Expense Offset (MEO)
A tax rebate /offset is available to any taxpayer whose net medical expenses (for themselves or their dependants) in the year of income exceeds $1,500. The amount of the rebate is currently 20% of the excess over $1,500 and is paid by the Australian Tax Office (ATO) as part of the taxpayer’s income tax return assessment.
Medical Expenses include payments made to registered medical practitioners, dentists and orthodontists. Also included are payments made to public or private hospitals in relation to an operation or illness.
Taxpayer has net medical expenses of $5,500. The taxpayer is entitled to a rebate/offset of 20% x ($5,500 - $1,500) = $800.
This means that 20 cents in every dollar spent on medical expenses, which is over the $1,500 threshold, is refunded to the taxpayer in the form of a tax offset. The 20% Medical Expense Offset (sec 159P) should not be confused with Medicare rebates or the 30% Private health Insurance Rebate. The Australian Federal Government has recently announced that from the 1st July 2005, “Purely Cosmetic” procedures will not qualify for the MEO.
You are advised to confirm your MEO entitlement with your accountant or the ATO prior to commencing treatment as the conditions and amounts governing the 20% MEO can change at any time and there are some matters individual to you which will need to be taken into account in calculating your net medical expenses.
Phone 1300 1300 12
The foregoing comments regarding tax and financial related issues are of a general nature only. Taxation law in Australia is complex and changes frequently. Accordingly, no person should rely on the general taxation and financial comments in this publication without first obtaining advice from a qualified professional person.
Mediplan, the Practitioner and staff are not responsible for the results of any action taken on the basis of the general taxation and financial information in this publication. They are not engaged in rendering legal, accounting, taxation or other financial advice. They expressly disclaim all and any liability and responsibility to any person in respect of anything and of the consequences of anything done or omitted to be done by any person in reliance, whether wholly or partially, upon the whole or any part of the general taxation and financial contents of this publication.
Mediplan is a broker. A third party selected by Mediplan will make the credit available to successful applicants.