With weight loss medications costing $100–500 per month, many Australians wonder if they can claim these expenses on their tax return.
Medical expenses tax offset
The medical expenses tax offset was discontinued for most Australians from 1 July 2019. However, there are still some limited circumstances where medical expenses may be relevant:
- Private health insurance: Having extras cover may provide a small rebate on consultation fees, but typically not on the medication itself
- NDIS participants: In very limited circumstances, weight management may be covered under NDIS plans
- Workers' compensation: If obesity is directly linked to a workplace injury
The bottom line
For most Australians, weight loss medication is an out-of-pocket expense that cannot be claimed on tax. The best way to reduce costs is to compare telehealth providers for the most competitive pricing, or check if you qualify for PBS-subsidised options.
What about health savings accounts?
Australia doesn't have a formal health savings account (HSA) system like the US. However, some Australians set up dedicated savings accounts for medical expenses. If you're spending $4,000–6,000/year on weight loss medication, budgeting for this as a health investment can make it more manageable.
Salary sacrificing for health
Some employers offer salary sacrifice arrangements for health-related expenses through packaging providers like Maxxia or SmartSalary. This is more common in the public sector, healthcare, and not-for-profit organisations. Check with your payroll or HR department whether medical expenses can be salary sacrificed — it effectively reduces the after-tax cost of your medication.
The real way to save on medication costs
Rather than tax deductions, the most practical ways to reduce costs are comparing telehealth providers (prices vary by $50-100/month), checking PBS eligibility, and discussing dose optimisation with your doctor.