IVF and taxes

Hi

I am getting mixed information and was wondering if anyone has talked to an accountant about what is and isn't claimable (don't worry, I'm not taking any thing anyone says as "tax advice"). Once you meet the safety net threshold, my understanding is all medical expenses you spend above the safety net amount (I think the safety net is $1500) are claimable on your tax statement.

I have a couple questions about this - what about DH's medical expenses? the $1500 safety net is calculated on a family basis, so once we reach this, then are DH's out of pocket costs deductible as well? on whose tax form? I would like to take them all on mine as I'm the one with the large medical expenses and our incomes are fairly equal. My accountant seemed to think that this isn't how it works and that he would ALSO have to be out of pocket $1500 and then he could claim his own medical expenses. He probably won't meet this expenditure although he has had some medical expenses. This also requires that as a family we be out $3000 ($1500) each before both of our expenses are deductible and this doesn't feel right to me.

What about accupuncture? naturopath? herbs? Although accupuncture was not "prescribed" by my FS, the clinic, when it does it's introductory presentation to all new patients suggests it as a way of dealing with ivf-related stress. What about vitamins - especially where the FS told us to take certain things? OR the GP telling you to start taking pre-conception vitamins?

I know these are complicated questions - but I'm trying to at least get my head around some of this stuff. I don't want to go through the hassle of calculating all these numbers only to find out we can't use them.

Thanks.

I'm a little foggy on all of this myself, but I understand that the medicare safety net is completely independent of and different to the tax thing. I'm not sure how it all works with partners as for the one year we have done (we're a bit behind in our taxes at the moment) we really only worried about mine. $16k of stuff gone through medicare and $12k back - increased my tax refund by about $800.

I understand that prescription medicines do count, but I'm still trying to find an answer with regards to OTC medications (unprescribed) and things like herbs/vitamins purchased somewhere other than a chemist. I also haven't got a clue how it works with the medical expenses of other family members... if we ever get our act together and get the three years of outstanding taxes done, I should be able to find out.

One thing I did like, my tax agent is quite happy for us to include the freezing and storage fees for our frozen embryos in the medical expenses we can claim. :)

BW

I'll try and put it as simply as I can for you :)

-Add up all yours and your DH's medical expenses for the year eg: 20k
-Subtract any refunds you received from Medicare or PHI eg: 15k
-From this amount, subtract $1500 eg: 5k-1500 = 3500
-Multiply this by 20% to calc the rebate eg: 3500*20% = 700

You can choose to claim this amount in either your return or your DH's. Generally, if someone is payable, you would include it in theirs to reduce the amount of tax they owe to the ATO. Your accountant has is wrong, you do a joint claim, and put it in whichever return is most beneficial for you.

You can only claim prescription medicine, so vitamins unfortunately dont make the cut. Acupuncture/herbs etc are contentious. They are not a medical treatment as such, and not provided by actual medical practioners. Anything IVF related, cycles, drugs, storage etc can be claimed.

HTH :)

Hi buliej,

My husband is an accountant and I could get him to look at this post when he gets home from work if you like?

Redlady

Hi buliej,

I'm a tax accountant (don't hate me lol!).

The 'medical expenses rebate' is a tax rebate and seperate/different from medicare safety net. The rebate works like this - once you spend over $1500 in out-of-pocket medical expenses you are entitled to a tax rebate of 20% of those expenses over $1500. Out-of-pocket being eligible medical expenses that have not been refunded by medicare or private health insurance. So if you are out of pocket $2000 in a financial year your rebate is $500 (the excess over $1500) x 20% ($100). This $100 comes off your tax payable.

In one person's return you can group all eligible medical expenses for the family - so when making your calculation include DH's eligible medical expenses too. You can do this on either of your tax returns, but keep in mind the rebate only reduces tax payable to nil - it will not provide an extra refund of any excess over tax payable.


Prescription medications do count. Over the counter vitamins, creams etc do not count, nor do 'medicines' from health care shops.
I claim my acupunture as my acupuncturist is a licensed medical pratitioner - but cannot claim the herbs. You can claim for therapeutic treatment but only if it at the direction of a doctor. This means a referral from your IVF doctor to a particular person for treatment. The suggestion or advice of your IVF doctor is not enough. I would think your naturopath and herbs are not 'eligible' medical expenses.

hope this helps a little. Happy for you to PM me if you have more questions :)

WOW - thanks everyone - these posts are really helpful. Once I go through my actual receipts, I may have more questions (esp. if my tax accountant takes a different view).

Redlady - it can't hurt to get someone else's view if you don't mind asking your husband to think about taxes during his free time!

Infinity - I'm a lawyer - I think lawyers are disliked more than accountants!

:

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Hi buliej,

I'm a tax accountant (don't hate me lol!).

You can claim for therapeutic treatment but only if it at the direction of a doctor. This means a referral from your IVF doctor to a particular person for treatment. The suggestion or advice of your IVF doctor is not enough. I would think your naturopath and herbs are not 'eligible' medical expenses.

:)

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Infinity, what would be an example of a therapeutic treatment apart from accupuncure?

Gosh ... everyone is accountant's and lawyers, now all we need is a FS ... :D

Hi WLB,

My understanding is that the ATO is referring to treatments like acu, chiro, rehabilitation, psychiatrists, - that type of thing - referred by your doctor as part of treating your illness.

Did you have something specific in mind? I can check it out for you if you want me to? PM me if you need to.

i have claimed this the past couple of years - my understanding is that any appt you make with an "alternative" therapist (chiro, naturopath, accu) isn't covered UNLESS it's referred by a medical practitioner. so, in the case of IVF, if your FS says you need accu to help you out, you can't just go and make an appointment, they have to refer you (and oversee the treatment - meaning there would be letters back and forth from FS to AP updating on progress etc) - if you go to AP on the recommendation of the FS WITHOUT him referring and overseeing the treatment, you won't get the rebate.

my FS suggested i try AP for a cycle when i asked for alternatives to help us out - that cycle was successful - the AP cost several hundred dollars out of pocket, but wasn't referred by the FS so couldn't be claimed on the net medical expenses thing.

Non-claimable expenses
Expenses which do not qualify for the tax offset include payments made for:

cosmetic operations for which a Medicare benefit is not payable
dental services or treatment that are solely cosmetic
therapeutic treatment where the patient is not formally referred by a doctor ? a mere suggestion or recommendation by a doctor to the patient is not enough for the treatment to qualify; the patient must be referred to a particular person for specific treatment -
chemist-type items ? such as tablets for pain relief ? purchased in retail outlets or health food stores -
inoculations for overseas travel
non-prescribed vitamins or health foods -
travel or accommodation expenses associated with medical treatment
contributions to a private health insurer
purchases from a chemist that are not related to an illness or operation
life insurance medical examinations
ambulance charges and subscriptions, and
funeral expenses.

Infinity and Brig Girl, the above is exactly what you said :D
However, is infertility an illness ? It feels like it to me . Who can argue it isnt, the auditor ? Does your accountant ask for a copy of the referal letter ? How does it work?
And from all your very helpful posts, I will now be seeing my FS and suggesting he write a referal for alternative treatments

Infertility is specifically classified as an ilness by the ATO. Lucky us hey,

Your accountant wont ask for a copy of the referal letter but you will need to keep it - and let your accountant know that you were referred for treatment by your doctor. You only need to prove your claims if you are audited. You could give the referral letter to your accountant just so they have it on file for you in the event of an audit if you like.

I'd advise ringing the ATO for any expense you are not sure of claiming and asking them for clarification - then keep a record of who you spoke to and what was said - just to back you up.

Hmm - reading what WLAB posted, I don't think my acupuncture treatments make the cut as I have no referral. The only thing I have is the handout from the ivf clinic that suggests accupuncture as one way of managing stress - and I have the print outs of the clinical trials showing acupuncture to be beneficial when done pre- and post- transfer.

Also, I've had 2 acupuncturists over the past tax year. Only the latter one has written to my FS to keep the FS apprised of my treatments - albeit at the initiative of the acupuncturist and not my FS.

I've spent thousands on acupuncture and I'd love to get something back as my private health insurance refunds very little and I reached their max for acupuncture some time ago...at the same time, I do not want to be subject to any tax penalties. It sounds like my situation just doesn't meet the criteria. The ONLY upside of this is that I don't have to add up the receipts and faint at the total $ spent. :redface:

Infinity - can I call the ATO on a no name basis?

Buliej - you can certainly call the ATO and not have to give your name or tax file number. number is 13 28 61.

My opinion is your acu is not an eligible medical expense for the rebate. Sorry! The only way you could claim it is if your acupuntarist is a ' legally qualified medical practitoner'. That said i haven't been able to find a definition of this from the ATO - but am assuming that if you went online to the Medical Practitioners Board (of your state 'cos i think it's a state thing) and searched their registered medical practitoners and your acupuntarist was a registered medical practitoner then it would qualify. You wouldn't have to qualify under the 'referral' thingy above. My GP is an asain man who does acupunture too - he is a legally qualified medical practioner - therefore payments to him for my 'ilness' are included in the eligible medical expenses in my opinion.

Hope that makes sense. I probably just confused you more! Also wanted to add I know many lawyers and all of them are lovely!

That's nice of you to say, Infinity.:D

I looked up my acupuncturists to see if they were registered. My old one was not, but my new one is - she's listed on the Medical Practitioners Board of Victoria as having a registration type "General" . Sounds like maybe her treatments qualify without worrying about the referral stuff???

I just called the ATO - and asked is a 'legally qualified medical practioner' one who is a registered medical practioner with the Medical Practioners Board of my state? - and they have said 'yes'.

So buliej - i think you are safe with your new acupuntarist. Maybe for extra reassurance call your acupunctarists and ask them if they are a 'legally qualified medical practioner'?

legal terms and jargon - yuck!

i would get more specific with the ATO about what you're intending to claim with the accu - even if they ARE a medical practitioner. the criteria are:

:

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You can claim expenses relating to an illness or operation paid to legally qualified doctors, nurses or chemists and public or private hospitals. However, expenses for some cosmetic operations are excluded.

Medical expenses which qualify for the tax offset also include payments:

to dentists, orthodontists or registered dental mechanics
to opticians or optometrists, including for the cost of prescription spectacles or contact lenses
to a carer who looks after a person who is blind or permanently confined to a bed or wheelchair
for therapeutic treatment under the direction of a doctor
for medical aids prescribed by a doctor
for artificial limbs or eyes and hearing aids
for maintaining a properly trained dog for guiding or assisting people with a disability (but not for social therapy)
for laser eye surgery, and
for treatment under an in-vitro fertilisation program.

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the way i read this, the fact that IVF is listed as a seperate factor, means that IVF/AC related accupuncture wouldn't qualify. IVF isn't an "illness" - it's medical treatment that they list seperately - so that you can get a rebate - it doesn't list accupuncture so it wouldn't be covered - no matter the other qualifications of the practioner. does that make sense? i think if you're going to claim AP you'd have to have a MEDICAL reason for the treatment received - if your GP also does AP, they'd have to have documentation of a medical NEED, not just to assist with relaxation, or with the success of your ET.

i always went by how my PHI classified things - if it was under hospital cover, it was included. under ancilliaries, unless seperately listed above, it didn't get included.

sorry - that might seem like i'm being a wet blanket - but if you've spent the kind of money you're talking, and get back the rebate, the last thing you want is to be audited and have to pay it back. be VERY specific in the questions you ask - i would ask "is accupuncture related to IVF/relaxation carried out by a member of the medical board (or whatever the term is) covered" - and to be honest, bugger the anonymity - i'd be asking that the advice you are given is documented on your file and a receipt number provided - so if you're misadvised, you have someone to throw it back at!

hmmmmm...the wording says legally qualified doctor...what do they classify as a doctor...because my chiropractor is a 'doctor' and so is my 'doctor of chinese medicine" ? Their wording is very ambiguous in that one...i always took that they were distinguishing between people who held recognised qualifications in those fields and those who were just handing out vitamins if get what i mean.......

Just wanted to clarify something in Briggsy's Girls' post. 'illness' is not defined in the tax act, however there is a tax ruling that states (specifically for infertility)
'illness' includes any disorder of the body, functions or systems
'operation' - an act performed by a hand or instrument to remedy deformity, injury, disease or pain.
It goes on to say that while infertility is caused by many different factors for different people the ATO accepts that infertility meets the definition of an 'illness' for the purposes of claiming eligible medical expenses.

Then from this point you need to look at the expense itself and make sure it it is an expense paid to 'legally qualified doctors, nurses etc'. As in my earlier post I would consider a doctor that is registered with the Medical Practioners Board a 'legally qualified doctor'.

Like most tax law its confusing and not very clear with lack of clear definitions or examples.

If you are unsure after talking to your accountant and the ATO don't claim the expense or apply for a private ruling specific to your circumstances. Our tax system is a self assessment system - which means we need to make decisions on what we claim based on the information available to us and our understanding of it.

Well, I called the ATO - she concluded that my acupuncture treatments from the acupuncturist who is registered are claimable but the ones from the one who is not are not.

Also, the ATO confirmed what Manhattan said, that because DH is my spouse, I can add his out of pocket medical expenses to mine and claim them all on behalf of both of us.

I also got a receipt number and she took my tax file number so I assume that even if down the road there is an issue, there is a record that I queried the ATO and was following their advice.

Thanks Buliej for finding that out. I had no idea that I could claim DH's expense with mine as his alone wouldn't reach the threshhold.

Dusty - same with us - although DH has expenses, he wouldn't meet the threshold on his own.

I do my own E-tax and was tearing my hair out a few days ago with this one...

I had already got my health fund to itemise what I had claimed on and E-tax had given me a total pre-filled Medicare figure. I had done the MC Investigation Program plus IVF and knew some items are not presented to Medicare, but which ones?

So I rang the accounts section of SIVF - best thing I could have done! Today in the mail I have recieved a copy of all my invoices. The accountant has very kindly divided them into:

1. Out of pocket expenses - can claim on tax (Medicare does not know of these)
2. Medicare claimable. My understanding is Medicare would have already taken these into account when pre-filling my tax return
3. Health Fund covered, eg: Theatre/Accommodation for EPU and ET. I can follow these through from my health fund printout.

I did not do the complete MC Investigation Program, but in my case I have learned I can claim for the "Med. Facility & Admin. charge inc. Coord. & couns" and "Thrombophilia Screening"

For IVF-ers - EMBRYO FREEZING WAS NOT COVERED BY MEDICARE. THIS IS A SUBSTANTIAL OUT OF POCKET EXPENSE.

Anyway, going to attempt to put all this paperwork to good use now. Wish me luck.

HTH ;)
WTH x

Buliej - just to clarify on claiming DH's out-of-pocket expenses on my tax return - is this only fertility related (which involves both of us) or can I claim all of his expenses (eg, medication when he had his wisdom teeth out)?

It is my understanding that it is all of his medical - not just fertility related.

Thanks, hun. That clears everything up for me ;)