Cosmetic cuts in Tax ruling changes in 2006

For the 2005–06 income year and later years, the law has been changed so that payments for the following items do not qualify for the net medical expenses tax offset:
• cosmetic operations for which a Medicare benefit is not payable, and
• dental services and treatment which is solely cosmetic.

Cosmetic operations

A cosmetic operation is one which beautifies or changes a person’s appearance.

Example 1 . Botox for wrinkles. These procedures are cosmetic and a Medicare benefit is not payable. These expenses are ineligible for the net medical expenses tax offset.

Example.2 Rhinoplasty - A cosmetic operation to remove a bump on her nose.
The expenses are ineligible for the net medical expenses tax offset.

However, if the operation to correct a breathing difficulty, a Medicare benefit would be payable. While the operation might still be cosmetic in nature, her expenses would be eligible for the net medical expenses tax offset.

Example 3 Breast surgery
Breast implants as a purely cosmetic procedure is not eligible.

Breast reduction is eligible if there is a Medicare item number and it is not purely for cosmetic purposes.

Reconstructive surgery following earlier surgery to remove breast cancer. A Medicare benefit is payable for the reconstructive surgery. The expenses are eligible for the net medical expenses tax offset.

What is the medical expenses tax offset?
The medical expenses tax offset may be available if you have out of pocket medical expenses over a specified limit in an income year.
For the 2004-05 income year, the tax offset is 20% - 20 cents in the dollar - of your net medical expenses over the $1,500 threshold amount. There is no upper limit to the amount you can claim.

from ATO web site Wednesday, 10 May 2006