2 January 2002 External T.I. 2001-0111755 - MEDICAL EXPENSE-HOT TUB

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: Does the cost of a hot tub qualify as an eligible medical expense?

Position: No - but the cost of the renovation to the t/p's dwelling required to install the hot tub may qualify as a medical expense under 118.2(2)(l.2) if certain conditions are met

Reasons: not described in regulation 5700 - allowed under 118.2(2) solely with respect to installation costs of a hot tub for persons having a severe and prolonged mobility impairment.

XXXXXXXXXX 					2001-011175
						Shaun Harkin, CMA
January 2, 2002

Dear XXXXXXXXXX:

Re: Technical Interpretation Request: Medical Expense

This is in reply to your letter of November 6, 2001 wherein you ask whether the cost of a hot tub qualifies as a medical expense for purposes of the medical expense credit.

It is our long-standing position that the cost of a hot tub does not qualify as a medical expense for purposes of the medical expense credit. In order for an expense to qualify as a medical expense for purposes of the medical expense credit, it must be described in specific provisions of subsection 118.2(2) of the Income Tax Act (the "Act") or prescribed by section 5700 of the Income Tax Regulations (the "Regulations"). The cost of a device or equipment may qualify as a medical expense only if it meets all of the criteria of paragraph 118.2(2)(m) of the Act. One of the criteria set out in this paragraph is that the device or equipment be prescribed under section 5700 of the Regulations. As a hot tub, whirlpool, spa or its equivalent is not listed in section 5700 of the Regulations as a medical device or equipment, the cost of purchasing such a unit does not qualify as a medical expense under paragraph 118.2(2)(m) of the Act.

If a medical practitioner prescribes treatments in, for example, a hot tub or a whirlpool bath the cost of the treatment qualifies as a medical expense under paragraph 118.2(2)(a) of the Act. However, if a hot tub or whirlpool is purchased, the cost does not qualify as a medical expense under paragraph 118.2(2)(m) of the Act since it is not prescribed in the Regulations.

On November 21, 2001, the Federal Court of Appeal, in the case of Her Majesty the Queen v. Beth Gibson, found that since the alterations to the taxpayer's dwelling enabled the taxpayer, who had a severe and prolonged mobility impairment, to be functional within the dwelling, the cost of the renovations to the taxpayer's dwelling required to install a hot tub qualify as a medical expense under paragraph 118.2(2)(l.2) of the Act.

It is our opinion that the impact of this decision should be limited to those cases involving identical facts and circumstances solely with respect to installation costs of a hot tub for persons having a severe and prolonged mobility impairment.

The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R4, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Customs and Revenue Agency. Our practice is to make this disclaimer in all instances in which we provide an opinion.

We trust the above comments are of assistance.

Yours truly,

Steve Tevlin
for Director
Partnerships Section
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch