LASIK Quest (Sydney, Australia)

I did some research today on how I can make the LASIK procedure a little cheaper with the help of a tax reduction.

Laser eye surgery is not covered by normal medical insurance (eg MBF). I asked them about it some time ago, and they said it's not covered but they are considering it. You'd think it would be worthwhile for them since it would reduce future optometry bills, and they probably cover costs if anything goes horribly wrong and further operations are required. So, why don't they cover the procedure? I think it's because they don't have to -- why start paying when there's no competitive pressure to do so.

So, the next option was to look at a tax reduction. Australian tax returns allow a deduction for 'Net Medical Expenses', which are basically medical costs not otherwise reimbursed through Medicare or Health Funds. It covers things like chemist charges, gap payments, equipment and nursing.

It covers 20% of costs above $1,500. Typical families wouldn't have net expenses that high, but people on expensive drugs would easily hit that limit. In the case of my family, we carefully track our medical costs throughout the year, especially when the kids get sick during winter. It's not easy to amass enough costs to hit the $1,500 starting point, but worth a try to earn some money back from the government!

If the LASIK procedure is going to cost me $6500, then it should return 20% of $4000 -- or about $1000. That certainly makes it cheaper!

However, while I was having my initial consultation, I was told that the government had disallowed deductions for Laser Eye Surgery since the start of this financial year (1-Jul-05) -- something to do with it being a costmetic expense, which is not covered. Apparently they were quite busy towards the end of the last financial year, trying to fill the demand before the payment disappeared!

Now, I didn't like the fact that I had missed out, so I contacted the ATO. First, I visited their website and found a couple of interpretive decisions:

• ATO ID 2001/721 - Medical expenses tax offset - laser eye surgery
• ATO ID 2004/51 - GST and laser vision correction surgery

The first one, written in 2001, says that Laser Eye Surgery does qualify as a Net Medical Expense. The second, from 2004, says that it is not cosmetic in nature since the appearance of the eye does not change, and is therefore GST-free. That bit isn't so important as the argument that it is not cosmetic in nature.

I tracked down a press release from the Treasurer dated 10-May-05 explaining about the exclusion of cosmetic surgery is claiming Net medical Expenses.

I then rang the ATO, gave them these references, and asked if I could claim it. They said that the quoted decisions are still 'current', so it would be OK. I could also ask for a private ruling to be sure.

So, as far as I'm concerned, I should be able to claim the deduction.

-- Fabbo


Tags: LASIK Laser Eye Surgery