30 April 2003 External T.I. 2003-0011815 - MEDICAL EXPENSE TAX CREDIT

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: Does the cost of a personal support worker qualify as a medical expense for the purpose of the medical expense tax credit?

Position: Yes, if the patient is eligible for the disability tax credit and the expense is not otherwise claimed under any other provision of the Act. However, the total claim in any year for a personal support worker and all other attendant care expenses is limited to $10,000 ($20,000 in the year of death).

XXXXXXXXXX 2003-001181
Daryl Boychuk, LL.B
April 30, 2003

Dear XXXXXXXXXX:

Re: Technical Interpretation Request: Medical Expense Tax Credit

We are writing in reply to your letter dated March 28, 2003 wherein you asked us if a payment to a personal support worker ("PSW") for care provided to a patient who is receiving nursing care at home would be eligible for the medical expense tax credit. More specifically, your concern is whether the cost of a PSW would only qualify for the medical expense tax credit if the patient were eligible for the disability tax credit. In your letter, you stated that a PSW provides a range of services such as home management, personal care as well as assisting patients with other routine and recreational activities.

Subsection 118.2(2) of the Income Tax Act (Canada) (the "Act") contains a list of expenses that qualify as medical expenses. Paragraph 118.2(2)(b.1) of the Act includes an amount paid as remuneration for attendant care in Canada up to a maximum of $10,000 for the year ($20,000 where the individual died in the year) if all of the following conditions are satisfied:

(a) the individual is entitled to a credit under section 118.3 (disability tax credit);

(b) the amount paid is not claimed under section 63 (child care), section 64 (attendant care) or another provision dealing with medical expenses;

(c) the attendant is not the individual's spouse, common-law partner, or a person under 18 years of age; and

(d) a receipt is issued by the attendant that includes his/her social insurance number.

We consider "attendant care" to be the personal care that is necessary to enable a person with a disability to carry out certain activities and may include meal preparation, maid and cleaning services, transportation, and personal services, such as banking and shopping. Attendant care would also include providing companionship to a person with a disability.

Accordingly, to the extent that a patient's attendant care expenses do not exceed the prescribed limits, the cost of a PSW will qualify for the medical expense tax credit if

(i) the PSW is providing attendant care to the patient;

(ii) the patient is entitled to the disability tax credit; and

(iii) the requirements described in (b) to (d) above are satisfied.

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 Canada Customs and Revenue Agency. Our practice is to make this disclaimer in all instances in which we provide an opinion.

We trust that our comments are of some assistance.

Yours truly,

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

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