I asked my accountant to clarify that and he said no, not the case. Only prescriptions...

A lot of accountants are misinformed on this point....just google it to see the variety of views accountant websites give....don't blame them as very vague wording.

I contacted the ATO 3 times until I got someone good who found an existing ATO personal ruling explicitly confirming you could claim non prescription items as long as:

1. You bought it at a chemist - not a supermarket.

2. It is for a current illness...ie you have a headache at the time you buy the tablets...which is impossible for them to disprove...

It even used headache tablets as the example non prescription product

Hmm, so any suggestion on how to call up my accountant and tell him?

You should get on the blower and bet him a tenner he's wrong. After he agrees tell him to check private ruling 44867 with the ATO.



Here's an excerpt I had saved (I have marked in bold parts I think relevant). Note it is cold and flu tablets rather than headache tablets used in the example. Note that all the conditions listed in "The Subject Of The Ruling" section are just various examples that the ruling is judging.



EDITED VERSION OF NOTICE OF PRIVATE RULING

Authorisation Number: 44867

This Ruling is a .Private Ruling. for the purposes of Part IVAA of
the Taxation Administration Act 1953.

YEAR(S) OF INCOME TO WHICH THIS RULING APPLIES:
Year ended 30 June 2005

TAX LAW:
Income Tax Assessment Act 1936 Section 159P.
Income Tax Assessment Act 1936 Subsection 159P(4).
Income Tax Assessment Act 1936 Paragraph 159P(4)(a).


WHAT THIS RULING IS ABOUT

Are you entitled to a medical expense tax offset for the cost of
chemist and pharmaceutical expenses?

THE SUBJECT OF THE RULING:

Both your spouse and you suffer medical conditions.

In preference to prescription medication your doctors prefer you
to use over the counter medications.

You injured yourself some time ago which resulted in minor soft
tissue damage and recurring pain. You can use prescription
medication for this but prefer to use external anti-inflammatory
medications which usually work.

You work in an environment which can cause eye irritation for
which you use eye drops.

Both your spouse and you get colds and flu for which you use
cold and flu tablets and cough medicines often on
recommendation from your doctors.

One of your spouse's prescribed medications has a side effect
for which they use a non-prescription medication with the
recommendation of his doctor.

Your doctor does not oversee the use and application of your
treatment all of the time. You and your spouse go to your doctors
for regular check-ups due to your ill health and at these times
they check to see how the products have worked.

You have provided details of all of the medications which you
purchase from a chemist and which are recommended by your
doctor.

You pay for the items on purchase.

You receive no reimbursement for any of the products from
either Medicare a private health fund or other entity or
individual.

You keep receipts for all purchases.


COMMENCEMENT OF ARRANGEMENT:

The term iillness' was discussed by Taxation Board of Review
No. 3 in Case Q21 83 ATC 77; (1983) 26 CTBR(NS) 570 Case
85 . Dr Gerber expressed his understanding of the concept of
illness in these words:

.Illness. is not defined in the Act. However I do not accept
that it is a term of art. Adopting a purposive construction I
find the term includes any condition marked by a
pronounced deviation from the normal healthy state. If this is
the correct view .illness. must include any disorder of body
function or systems.

We consider that the conditions that you suffer from are all
disorders of the body and are viewed as illnesses.

You have purchased various medications over the counter from
a chemist without a script for your illnesses. Any medications
that you purchase from a legally qualified chemist to treat an
illness are eligible medical expenses for the purposes of the
medical expenses tax offset under section 159P of the ITAA
1936.

As you have purchased the items from a chemist you are
entitled to a tax offset of 20% of the excess above $1500.
It should be noted that items purchased for preventative
purposes are not allowable. The payment must be in respect
of an illness you suffer from.

Disclaimer
The Register of Private Binding Advice is published as a public
record of the binding advice issued by the Tax Office. Each piece
of advice is based on a specific set of circumstances advised to
the Tax Office and the law in force at the time of the adviceB and
is considered binding only in respect of the personls or entitylies on
whose behalf the advice was sought.

A fair bit of "doctors" being mentioned in this ruling.

Is that with Class One in Rockingham?

Jules x

Yeah at first reading I thought the same.....but it seems to be just injecting the word as a common occurence within making it a hard requirement....trumped by paragraphs like:

You have purchased various medications over the counter from
a chemist without a script for your illnesses. Any medications
that you purchase from a legally qualified chemist to treat an
illness are eligible medical expenses for the purposes of the
medical expenses tax offset under section 159P of the ITAA
1936.


I mean look at the use of doctor here:

"Both your spouse and you get colds and flu for which you use
cold and flu tablets and cough medicines often on
recommendation from your doctors. "

Yes we do get colds and often my doctor may recommend I buy cold and flu tablets if I ever asked him....