11 June 2002 External T.I. 2002-0131445 - MEDICAL EXPENSES

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 CCRA.

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

Principal Issues: The t/p suffered a heart attack while vacationing in XXXXXXXXXX . Do various unreimbursed expenses incurred qualify as medical expenses?

Position: yes to ambulance costs and amounts paid to doctor and hospital for medical services; probably no to travel/transportation exp.; rental of medical equipment may qualify (details not provided); no to telephone exp.

Reasons: travel/transportation exp. probably denied because it is likely that comparable medical services were available closer to the locality at which the t/p was dwelling

XXXXXXXXXX 2002-013144
Shaun Harkin, CMA
June 11, 2002

Dear XXXXXXXXXX:

Re: Technical Interpretation Request: Medical Expenses

This is in reply to your letter of March 25, 2002, regarding the deductibility as medical expenses of certain expenses that you incurred in XXXXXXXXXX while vacationing in XXXXXXXXXX.

As we understand it, while you were on vacation in XXXXXXXXXX you suffered a heart attack. You have informed us that you chose to return to Canada to have the resulting required surgery after discovering that, "having this surgery in XXXXXXXXXX could involve a minimum stay of two months, possibly longer, subject to the availability of a bed in a hospital in which by-pass surgery was performed". You also informed us that the XXXXXXXXXX hospital required you to be accompanied by a medical doctor for your trip back to Canada and the airline required the doctor to have various medical apparatus.

You incurred the following expenses that you have not been and will not be reimbursed for:

XXXXXXXXXX.

Written confirmation of the consequences inherent in particular transactions are 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. If, however, the particular transactions are partially completed or completed, the enquiry should be addressed to the relevant Tax Services Office. Notwithstanding the foregoing, we are providing the following comments.

Our Comments

Subsection 118.2(2) of the Income Tax Act (the "Act") describes in detail the types of medical expenses that may qualify for the medical expense tax credit.

Paragraph 118.2(2)(a) of the Act allows an individual to include, as a qualifying medical expense, an amount paid to a medical practitioner, dentist or nurse or a public or licensed private hospital for medical or dental services provided to the patient. It is our view that, generally, items numbered 2 and 7 above would qualify as medical expenses under paragraph 118.2(2)(a) of the Act.

An amount paid for transportation of a patient by ambulance to or from a public or licensed private hospital qualifies as a medical expense under paragraph 118.2(2)(f) of the Act. It is our view that items 1 and 10 above would qualify as medical expenses under paragraph 118.2(2)(f) of the Act.

The provisions that apply to transportation and travel expenses as medical expenses are in paragraphs 118.2(2)(g) and (h) of the Act. If expenses for transporting the patient are being claimed under paragraph 118.2(2)(g) or (h) of the Act, those provisions also allow the same kind of expenses for transporting one individual who accompanies the patient provided that a medical practitioner has certified that the patient is incapable of travelling without an attendant. Both paragraphs 118.2(2)(g) and (h) of the Act require a taxpayer to meet the conditions of subparagraphs 118.2(2)(g)(iii) to (v) of the Act in order to have the amounts paid qualify as medical expenses. The conditions of subparagraphs 118.2(2)(g)(iii) to (v) of the Act are:

(iii) substantially equivalent medical services are not available in that locality,

(iv) the route travelled by the patient is, having regard to the circumstances, a reasonably direct route, and

(v) the patient travels to that place to obtain medical services for himself or herself and it is reasonable, having regard to the circumstances, for the patient to travel to that place to obtain those services.

We are reasonably satisfied that the requirements of subparagraphs 118.2(2)(g)(iv) and (v) of the Act are satisfied. However, it is not clear that the requirement in subparagraph 118.2(2)(g)(iii) of the Act is met. If comparable medical services were available closer to the locality at which you were dwelling (i.e. XXXXXXXXXX) when you became ill, which seems likely, the transportation and travel expenses you have described (i.e. items 3, 5, and 6 above) would not qualify as medical expenses because the condition stated under subparagraph 118.2(2)(g)(iii) of the Act would not be met.

The rental of medical equipment (item 8 above) may qualify as a medical expense under paragraphs 118.2(2)(i), (k) or (m) of the Act. Paragraph 118.2(2)(m) of the Act provides the authority for including various types of devices and equipment as medical expenses for purposes of the medical expense credit. To qualify under paragraph 118.2(2)(m) of the Act (and subject to certain prescribed limits), the device or equipment must satisfy the following conditions: (i) be of a prescribed kind; (ii) be prescribed by a medical practitioner; (iii) not be described in any other paragraph of subsection 118.2(2) of the Act; and (iv) meets such conditions as may be prescribed as to its use or the reason for its acquisition. For the purposes of paragraph 118.2(2)(m) of the Act, section 5700 of the Income Tax Regulations lists the devices and equipment that are of a prescribed kind.

We see no basis for allowing the cost of telephone calls (item number 4 above) as medical expenses.

Due to the lack of details we are unable to comment on item number 9 above. We have enclosed a copy of Interpretation Bulletin IT-519R2 (Consolidated), Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, for your information. Please note, as stated in paragraph 67 of IT-519R2 (Consolidated), proper receipts must support all expenses claimed as qualifying medical expenses.

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

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