17 May 2004 External T.I. 2004-0071411E5 - Medical expenses- special food

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.

Principal Issues: Do the cost of meal replacement liquids qualify as medical expenses?

Position: Question of fact

Reasons: Not specifically covered by 118.2(2)(n), but will qualify if prescribed by medical professional and recorded by pharmacist.

XXXXXXXXXX

May 17, 2004

Dear XXXXXXXXXX:

Re: Meal Replacement and Medical Expenses

We are writing in reply to your letter of March 25, 2004, concerning the eligibility of meal replacement costs as medical expenses. Your letter explains that as a result of having cancer your client is unable to consume any food other than "Ensure Plus" and Ensure Fibre" which are liquid meal replacements generally available for purchase in a pharmacy. You have asked us if such costs qualify as medical expenses for purposes of the Income Tax Act (the "Act").

Written confirmation of the tax consequences that apply to a particular fact situation is given by this directorate only in the context of an advance ruling request submitted in the manner set out in Information Circular 70-6R5. Notwithstanding the foregoing, we are prepared to provide the following general comments.

There are three categories of drugs, medicaments or other preparations or substances the cost of which may qualify as a medical expense for purposes of the Act:

a) drugs, medicaments or other preparations or substances, prescribed by a medical practitioner, and purchased from a pharmacist who records the prescription in a prescription record, and

b) insulin, oxygen and liver extract injectible for pernicious anaemia and vitamin B12 for pernicious anaemia, prescribed by a medical practitioner, and

c) the incremental cost of gluten-free food products, as compared to the cost of comparable non-gluten-free food products, if the patient has been certified in writing by a medical practitioner to be a person who, because of celiac disease, requires a gluten-free diet.

As the food items required by your client are not those described in (b) or (c) above, the requirements in (a) would have to be met in order for such costs to qualify as medical expenses. Namely, these items must have been prescribed by a medical practitioner and must have been purchased from a pharmacist who has recorded the prescription in a prescription record as required under provincial legislation. These requirements do not preclude claims in respect of drugs and other substances, including fortified meal replacement liquids, where these items also happen to be available over the counter without a prescription.

In addition, in order for the amounts described in (a) to qualify as medical expenses, they must be manufactured, sold or represented for use in:

a) restoring, correcting or modifying an organic function,

b) diagnosing, treating or preventing a disease, disorder or abnormal physical state, or

c) treating the symptoms of a disease, disorder or abnormal physical state.

Accordingly, the cost of the liquid meal replacements may qualify for purposes of the medical expense tax credit if the items in question were dispensed by a pharmacist, recorded in a pharmaceutical record, and met the other requirements described above.

Your client may also be eligible for the disability income tax credit ("DTC"), which is available to persons with a severe and prolonged mental or physical impairment that markedly restricts their activities of daily living. Unlike medical expenses, specific expenses do not have to be incurred by the disabled person to qualify for the credit. In order to claim this credit, Form T2201 must be completed and certified by a qualified medical professional, and filed with your client's income tax return. For more information on this credit, you should consult our website, www.ccra-adrc.gc.ca.

We trust the above comments are of assistance.

Yours truly,

Wayne Antle, CGA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate