Medical Expenses

12.35. The present provisions relating to medical expenses (in a broad sense of those words) are contained in three sections of the Act:

  • (a) Section 82HA allows a deduction of amounts paid by the taxpayer in the year of income to a medical or hospital benefits fund for the personal benefit of the

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    taxpayer or his spouse or child. The fact that the spouse or child has income is irrelevant.
  • (b) Section 82F allows a deduction of an amount paid by the taxpayer as medical expenses (as defined) in respect of himself or in respect of a dependant (again as defined). The amount is net of any sum the taxpayer or any other person is entitled to be paid by a government or public authority or by a fund referred to in section 82HA or any other society, association or fund. The term ‘medical expenses’ as used in the section covers a wide range of payments:
    • to a doctor, nurse or chemist or to a hospital;
    • to a dentist or to a registered dental mechanic;
    • for therapeutic treatment by direction of a doctor;
    • in respect of an artificial limb or eye, or a hearing aid;
    • in respect of a medical or surgical appliance prescribed by a doctor;
    • for optical services and the supply of spectacles under prescription;
    • for the services of an attendant for a blind person or a person confined to a bed or an invalid chair;
    • for the maintenance of a trained guide dog for a blind person.
    • ‘Dependant’, for purposes of the section, means the spouse of the taxpayer, or his child if less than 21 years of age and a person in respect of whom he is entitled to a deduction under section 82B. The relevant provisions of the latter section are explained above in paragraphs 12.11 and 12.16.
  • (c) Section 82G allows a deduction, limited to $100, for the funeral expenses of a dependant. A dependant has the same meaning as in section 82F.

12.36. It will be noted that in all instances where the payment is in respect of a spouse or child of the taxpayer, any income of the spouse or child is irrelevant. This might be thought anomalous, having regard to the fact that a payment in respect of any other person will qualify for deduction only when that other person's income is small enough to allow the taxpayer a dependant's deduction under section 82B. On the other hand, it could be argued that the anomaly lies in the qualified nature of the deduction in respect of these other persons. Thus a dollar of income in excess of $390 derived by an invalid relative has the effect of denying the taxpayer a medical expense deduction in respect of that relative. While this may be unavoidable if the medical expense deduction is to be kept within bounds, the Committee would think that in the case of spouse and child it is more appropriate, as now, not to impose any such qualification.

12.37. In the discussion that follows, attention is initially focused on the deductions referred to under (a) in paragraph 12.35, and also under (b) except for the last two items relating to blind persons and the seriously disabled. The remaining two items under (b) are then examined, followed by a brief comment on the funeral expense deduction.