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:
Tax treatment under paragraph 81(1)(h) of the Act of payments under a specific program.
Position TAKEN:
Question of fact. Exempt if all conditions in paragraph 81(1)(h) are met.
Reasons:
Consistent with CCRA policy for years after 1997.
XXXXXXXXXX 2001-007129
T. Young, CA
April 5, 2001
Dear XXXXXXXXXX:
Re: Exemption under paragraph 81(1)(h) of the Income Tax Act (the "Act")
This is in reply to your letter dated February 13, 2001, forwarded to us by the XXXXXXXXXX Tax Services Office, requesting our opinion as to whether the payments to caregivers by XXXXXXXXXX qualify for exemption under paragraph 81(1)(h) of the Act.
You stated that you have a situation where a cared-for individual receives Assured Income for Severely Handicapped ("AISH") payments and has living arrangements funded through the XXXXXXXXXX program. The caregiver will have his or her primary residence in the cared-for individual's home and will pay board to the cared-for individual. XXXXXXXXXX will monitor the arrangement and will provide support and training to the caregiver. In addition, XXXXXXXXXX will be receiving funds from XXXXXXXXXX and will pay the caregiver a fixed amount of money as agreed to by XXXXXXXXXX.
It is our understanding that your concern is whether payments to the caregiver living in this arrangement would be exempt income pursuant to paragraph 81(1)(h) of the Act.
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R4, dated January 29, 2001. It would also be necessary to review all relevant documentation before a definitive determination of the tax implications could be made. Therefore, we can only provide you with the following general comments.
In order for payments to a caregiver to be exempt under paragraph 81(1)(h) of the Act, the payments would have to be payments of social assistance and would have to satisfy the following conditions:
1. The payments must be ordinarily made on the basis of a means, needs, or income test.
2. The payments must be made under a program provided for by federal or provincial law.
3. The payments must be received directly or indirectly by the caregiver for the benefit of the cared-for individual.
4. The cared-for individual cannot be the caregiver's spouse or related to the caregiver or the caregiver 's spouse.
5. No family allowance under the Family Allowances Act or any similar allowance provided for by provincial law can be payable in respect of the cared-for individual for the period for which the social assistance payment is made.
6. The cared-for individual must live in the caregiver 's principal place of residence; or the caregiver 's principal place of residence must be maintained for use as the cared-for individual's residence during the period for which the payments are made.
To establish that the cared-for individual's home is the caregiver's principal place of residence, we would need to know the degree that the caregiver had the use of the common areas of the home, or if the caregiver were living in an apartment or separate living quarters. As well, the home would also have to be either the caregiver's only place of residence or the caregiver's chief or main place of residence. The place where most of the caregiver's belongings remained or where the caregiver received his or her mail would, among other factors, have an impact on the determination of the caregiver's principal place of residence.
If you require further assistance in determining the income tax treatment of the specific payments you are making, please contact the Client Assistance Division of the XXXXXXXXXX Tax Services Office.
We trust our comments will be of assistance to you.
Yours truly,
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2001
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2001
Email this Content