21 November 2002 External T.I. 2002-0171795 - 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 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 individual requested further clarification with respect to counselling services provided by a person with a Masters of Social Work degree.

Position: Counselling services provided by a person with a Masters of Social Work degree will qualify for medical expense tax credit if the following conditions are met:

1) the counsellor is working in a recognized mental health clinic, community agency or hospital, 2) the counsellor is a member of the association governing their particular profession, and 3) the treatment is at the request of or in association with a medical practitioner.

Reasons: Prior positions dealing with this issue.

Bob Naufal, CMA
XXXXXXXXXX (613) 957-2744
2002-017179
November 21, 2002

Dear XXXXXXXXXX:

Re: Master of Social Work

We are writing in response to your letter dated October 31, 2002, wherein you requested clarification of certain matters contained in our letter dated October 22, 2002. In that letter, we stated that a person with a Masters in Social Work degree would not be a medical practitioner because he or she is not authorized under the laws of Ontario to provide medical services. Accordingly, the cost of the counselling services provided by such a person would not qualify for the medical expense tax credit. Further to that letter, you have asked us if fees paid to certain unregulated professionals, such as a person with a degree in social work, could qualify as a medical expense if the counselling service is provided in association with a medical practitioner.

Our Comments

The CCRA considers fees paid to professional social workers, counsellors or other health professionals (collectively referred to as "counsellor") as qualifying medical expenses provided all the following conditions are met:

(a) the counsellor is working in a recognized mental health clinic, community agency or hospital,

(b) the counsellor is a member of an association governing their particular profession, and

(c) the treatment provided by the counsellor is at the request of or in association with a medical practitioner.

Generally, where an employer pays for an employee's medical expenses the amount paid is included in the employee's income as a taxable benefit. In such a circumstance, the employee is deemed to have paid the expenses and thus can include this amount in his or her claim for the medical expense tax credit. For further reference, see Interpretation bulletin IT-519R2 (Consolidated), Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, which is attached for your information.

However, we are of the view that no taxable benefit arises for any benefit derived by an employee if an employer provides or pays for certain counselling services in respect of the mental or physical health of an employee or an individual related to the employee (such as tobacco, drug or alcohol counselling, or stress management counselling). See, in this respect Interpretation Bulletin, IT-470R (Consolidated), Employees' Fringe Benefits, which is also attached. Where no amount is included in the employee's income as a taxable benefit, the employee would not be entitled to include this amount in his or her claim for the medical expense tax credit.

The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R5, the above comments do not constitute an income tax ruling and accordingly are not binding on the CCRA. Our practice is to make this disclaimer in all instances in which we provide an opinion.

We trust our comments will be of assistance.

Yours truly,

D. Boychuk, LL.B
for Director
Business and Partnerships Division
Income Tax Rulings Directorate

Attachments

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