Govt's medical expenses tax plan 'will hit Australians hard'

13 December, 2013

The federal government's plans to scrap the net medical expenses tax offset (NMETO) is a "short-sighted" budgetary measure that will hit taxpayers with large health bills hard, according to Australian Healthcare and Hospitals Association (AHHA) chief executive, Alison Verhoeven.

"While the government is seeking to portray the NMETO as a perk for the rich, its scrapping will have a significant effect on many Australians who struggle to pay medical expenses," Verhoeven said.

The government has suggested that the NMETO provides little assistance to those with limited tax liabilities.

However there are many Australians on modest incomes who are not eligible for other support that helps manage medical expenses, such as a Health Care Card. 

Scrapping the NEMTO will mean they will now be unable to claim tax offsets either, Verhoeven said.

"The Australian Bureau of Statistics (ABS) reported that in May 2012 the median weekly total earnings across all employees was $963. 

"Over 350,000 people with equivalent annual taxable incomes below this level submitted NMETO claims in 2010-11 totalling over $200 million.

"Removing access to this tax offset will place a further stress on these households and further increase the significant out-of-pocket expenses incurred by Australians.

"The growth in out-of-pocket expenses is a major issue for the Australian health system which requires a broad examination of cost drivers, healthcare funding and equity.

"It is not a problem that can be addressed by simple budgetary measures."

The AHHA represents Australia's largest group of health care providers in public hospitals, community and primary health sectors and advocates for universal high quality healthcare to benefit the whole community.