9 April 1997 Ministerial Letter 9707048 - CAP ON PHYSIOTHERAPY COSTS UNDER PSHCP

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:

to request that the Minister amend the Public Service Health Care Plan (PSHCP) so that the new $500 annual cap on physiotherapy not apply when the therapy is provided to a patient with disabilities after a stroke.

Position:

Revenue Canada's role is limited to ensuring that the plan meets the requirements of the ITA relating to private health services plans. Minister Stewart is an alernate member of Treasury Board but the Honourable marcel Masse will address client's recommendation directly.

Reasons:

ADM'S OFFICE (2) 97-01668M
RETURN TO 15TH FLOOR, ALBION TOWER

April 9, 1997

XXXXXXXXXX

Dear XXXXXXXXXX:

This is in reply to your March 2, 1997, correspondence, to members of the Treasury Board, concerning the $500 annual limitation on physiotherapy services under the terms of the Public Services Health Care Plan (PSHCP). Minister Stewart has asked that I respond to your comments.

You have asked that the PSHCP be amended so that the new $500 calendar year cap on physiotherapy services not apply when the therapy is provided to a patient with disabilities after a stroke. As you may be aware, Treasury Board approved the $500 cap on physiotherapy on the recommendation of the PSHCP Board of Management. Minister Stewart is an alternate member of Treasury Board, however, I have been advised that the Honourable Marcel Massé will respond to your recommendation directly. As a result, the following comments are limited to explaining the income tax implications of the PSHCP. I also trust that the National Joint Council of the Public Service of Canada, or the National President of the Federal Superannuates National Association, will address your objections to the $500 cap on these services as well as give consideration to your proposal that the cap not apply in some situations.

The PSHCP is a "private health services plan," as defined in the Income Tax Act. As such, Revenue Canada's role is limited to ensuring that the plan continues to meet the requirements of the Act relating to private health services plans. Generally, private health services plans can only provide coverage for hospital or medical expenses which would otherwise qualify for the medical expense tax credit. In Ontario, fees paid to a qualified physiotherapist can qualify for the medical expense tax credit. However, while these fees may qualify as medical expenses under the Income Tax Act, each individual plan may choose to limit the amount and type of qualifying medical or hospital expenses for which it will provide coverage. In this situation, Treasury Board has accepted the recommendations of the PSHCP Board of Management, and decided that coverage for physiotherapy services will be capped at $500 per calendar year, effective January 1, 1997.

Whether or not the PSHCP is further modified as a result of your recommendation, you or your spouse may claim a medical expense tax credit for that portion of physiotherapy fees for which you have not been reimbursed. If you pay a monthly contribution for supplementary coverage under the plan, that premium will also qualify for the medical expense tax credit.

I hope these comments will be of assistance to you.

		Yours sincerely,
		Denis Lefebvre
		Assistant Deputy Minister
		Policy and Legislation Branch
Sandra Short
March 21, 1997
957-2136