24 February 2006 External T.I. 2005-0153591E5 - Medical Expenses - Clinical Counsellors

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Whether fees paid for XXXXXXXXXX counsellors would qualify as medical expenses for the purposes of coverage under a private health services plan.

Position: Yes, if the counsellors: (a) are working in a recognized mental health clinic, community agency or hospital, (b) are members of the association governing their particular profession, and (c) are providing the medical services at the request of, or in association with, a medical practitioner.

Reasons: Prior positions dealing with social workers, counsellors and health professionals.

				2005-015359
XXXXXXXXXX 			Rob Ferrari
(613) 957-2138
February 24, 2006

Dear XXXXXXXXXX:

Re: XXXXXXXXXX
and Qualifying Medical Expenses

This is in reply to your letter of October 4, 2005, in respect of whether fees paid to XXXXXXXXXX counsellors would qualify as medical expenses for the purposes of coverage under a private health services plan. You have noted that coverage under a private health service plan must be in respect of hospital care or expense or medical care or expense under the provisions of subsection 118.2(2) ("qualifying medical expenses") of the Income Tax Act ("the Act") in the determination of the medical expense tax credit.

You ask whether we would agree that XXXXXXXXXX fees are qualifying medical expenses on the basis that XXXXXXXXXX counsellors are medical practitioners.

Our Comments:

Under the Act, qualifying medical expenses include payments made to a medical practitioner, a dentist, nurse, or a public or private licensed hospital when the payments are made in respect of medical services provided to the individual, the individual's spouse or a dependant of the individual.

We have previously opined that XXXXXXXXXX counsellors are not "medical practitioners" since they are not authorized under the laws of XXXXXXXXXX to provide medical services. However, we would consider the fees paid for counselling services provided by XXXXXXXXXX counsellors to be qualifying medical expenses where the counsellors:

a) are working in a recognized mental health clinic, community agency or hospital,

b) are members of the association governing their particular profession, and

c) are providing the medical services at the request of, or in association with, a medical practitioner.

Interpretation Bulletin IT-519R2(Consolidated) discusses what is a "hospital" for income tax purposes and states "if the institution possesses a provincial licence designating it as a 'hospital', subject to its meeting and maintaining standards set by local health, building and fire authorities, the institution may qualify as a hospital for income tax purposes." Otherwise, it is a question of fact whether a particular institution is a recognized mental health clinic, community agency or hospital. It is relevant to such a determination what are the professional qualifications of the staff in attendance, and whether medical services are provided to its clients. Doubtful cases may be referred (on an individual basis), with full particulars, to the local Canada Revenue Agency tax services office.

XXXXXXXXXX Based on the above, we are of the view that the XXXXXXXXXX counsellors are members of an association governing their particular profession.

Our comments represent our general views with respect to the above noted subject matter. As indicated in paragraph 22 of Information Circular 70-6R5, our comments do not constitute an income tax ruling and accordingly are not binding on the Canada Revenue Agency.

Yours truly,

Robin Maley
Manager
Partnership and Health Section
Income Tax Rulings Directorate
Policy and Planning Branch