The net medical expenses tax offset (NMETO) is being phased out.

To be eligible for the NMETO for 2014–15, you must have received an amount of the tax offset in both of 2012–13 and 2013–14 income tax assessments.

The eligibility rule for the NMETO does not apply to clients with out-of-pocket medical expenses relating to disability aids, attendant care and aged care. These expenses can continue to be claimed until 30 June 2019 in the Total net medical expenses label.

Meaning of ‘received’

‘Received’ means that you must have had an amount of NMETO greater than zero shown on you notice of assessment, refer to subsection 159P(1C) of the Income Tax Assessment Act 1936.


If your 2012–13 notice of assessment shows an amount of zero for NMETO you wouldn’t have received this offset in your income tax assessment and so are not eligible to make a claim in 2013–14 or 2014–15.


Section 63-10 of the Income Tax Assessment Act 1997 requires tax offsets against gross tax to be applied in a priority order. This means that tax offsets including the seniors and pensioners tax offset and the low-income tax offset must be applied before NMETO or other non-refundable tax offsets are considered.
if you would like more information about this and how it may effect you, please call us today.

Submitted by: Eric Farrance – Senior Manager

Eric Farrance

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