13 June 1996 External T.I. 9610485 - TUITION FEES AS MEDICAL EXPENSE

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

whether tuition fees paid to a particular school qualifies under 118.2(2)(e) of the Act.

Position:

Individual, not "school, institution or other place", is the one who must qualify under 118.2(2)(e). Thus, is an individual determination.

Reasons:

While it appears that the school may qualify for those individuals who are certified as requiring the school's equipment, facilities or personnel as "specially" provided by the school (where the student suffers a mental or physical handicap), it is the student who must require the school's equipment, facilities or personnel so cannot give a generic stamp of approval to the facility. Department's position is that the equipment, facilities or personnel which is "specially" offered by the place means that the special equipment, facilities or personnel are not available to the student in the public school system

		961048
XXXXXXXXXX	Sandra Short

Attention: XXXXXXXXXX

June 13, 1996

Dear Sirs:

Re: Paragraph 118.2(2)(e) of the Income Tax Act (the Act)

This is in reply to your letter of March 7, 1996, addressed to the XXXXXXXXXX Tax Services Office, which asks whether XXXXXXXXXX may be considered a school, institution, or other place for the care, or the care and training, of individuals who are physically or mentally handicapped for purposes of the above-noted provision. As discussed in paragraph 32 of Interpretation Bulletin IT-519R (a copy of which is enclosed for you), the costs paid for the care, or the care and training, of a patient at a school, institution or other place will qualify under paragraph 118.2(2)(e) of the Act as a medical expense, when an appropriately qualified person has certified that patient to be a person who, by reason of a physical or mental impairment, requires the equipment, facilities or personnel specially provided by that place.

The literature sent by you indicates that XXXXXXXXXX is a school which offers a number of programs specially designed to meet the needs of students with learning disabilities and other difficulties. While a school, institution or other place may issue a receipt which contains the information found in paragraph 68 of Interpretation Bulletin IT-519R, it remains a question of fact whether a particular individual is entitled to a claim under paragraph 118.2(2)(e) of the Act. The issue, as we see it, is not whether the school, institution or other place qualifies but whether the individual attending that place meets the requirements of paragraph 118.2(2)(e).

In order for fees paid to your school to qualify as medical expenses for any particular student, three basic requirements must be met:

1.The student must be certified by an appropriately qualified person. This certification will usually be carried out by a medical practitioner, such as a psychologist, but is not restricted to such professionals.

2.The student must be suffering from a physical or mental handicap. A student suffering from behavioral problems arising out of a mental or physical impairment or a student suffering from a learning disability or disabilities is considered to be suffering from a physical or mental handicap.

3.The student must require the equipment, facilities or personnel specially provided by the school to treat the student's particular physical or mental handicap. The determination that the student "requires" the equipment, facilities or personnel specially provided by the school must be made by the qualified person or persons making the certification noted in 1 above. The severity of the student's disabilities must be such that the student "requires" the specialized equipment, facilities or personnel provided by the school and not merely that the student will benefit from such equipment, facilities or personnel.

You have been quoted in one of the newspaper articles, submitted by you, as saying that there are two kinds of students at
XXXXXXXXXX.

Paragraph 118.2(2)(e) provides that the patient's mental or physical handicap must be of a severity so as to "require" the equipment, facilities or the services of the personnel and, further, that the equipment, facilities or personnel be "specially" provided for the care, or the care and training, of individuals suffering from the handicap suffered by the patient. The Department has interpreted the latter clause to mean that the equipment, facilities or personnel which the place "specially" offers means that the special equipment or facilities or services of specially-trained personnel is not available to the student in the public school system.

Tuition fees paid for those students who attend XXXXXXXXXX because such attendance is beneficial over attendance in the regular school system, would not qualify as medical expenses for purposes of the medical expense tax credit. However, when a student is certified by an appropriately qualified person to be a student suffering a physical or mental handicap and, who, by reason of his or her particular disability, requires the equipment, facilities or personnel which your school specially provides (and which is not available in the public school system), then tuition fees paid for such students would qualify for purposes of paragraph 118.2(2)(e) of the Act.

We trust our comments will be of assistance to you.

Yours truly,

John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch