Do you have any large medical expenses? What happens to you if you aren’t able to claim these expenses?
As announced in the Government’s 2013-14 Budget, net medical expenses tax offset (NMETO) will be phased out by July 1, 2019. You should check whether you qualify to claim the NMETO.
Here are some further details
- NMETO is a tax offset that may be claimed by eligible individual taxpayers in their annual tax returns.
- Eligibility for NMETO is dependent on a taxpayer’s family status and their adjusted taxable income (ATI).
- In the 2013-14 Budget, the Government announced that the NMETO will slowly be phased out by July 1, 2019.
- Medical expenses incurred during the 2013-14 and future income years, can be claimed as normal in a taxpayer’s individual tax returns where the eligibility criteria are met up to the 2018-19 financial year.
However, if a taxpayer did not claim the NMETO in their 2012-13 tax return, they will not be eligible to claim the tax concession even if the other conditions are met for subsequent income years.
- The exception to this rule is for taxpayers who have medical expenses in relation to disability aids, attendant care or age care expenses. If a taxpayer incurred any of the mentioned medical expenses, they will not need to have claimed the NMETO in their previous tax returns to remain eligible in subsequent income years.
- Currently, the threshold for medical expenses using a taxpayer’s ATI is $84,000 for singles and $168,000 for couples.
- If a taxpayer’s ATI is below the threshold, any medical expenses in excess of $2,120 can be claimed at 20%. For those above the threshold, a 10% rate applies if medical expenses are in excess of $5,000.
To get further clarification book an appointment with one of our advisors here. We can also let you know what medical expenses are claimable.