6 February 2006 External T.I. 2005-0155731E5 - Disability Tax Credit and Care in Nursing Home

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: Whether the Disability Tax Credit may be claimed where the cost of nursing home care is also claimed as a medical expense.

Position: Question of Fact

Reasons: Where the reason for residing in a nursing home has met the conditions of paragraph 118.2(2)(e), the disability tax credit will not be denied solely because the residence qualifies as a nursing home.

								2005-015573
XXXXXXXXXX 							Rob Ferrari
(613) 957-2138
February 6, 2006

Dear XXXXXXXXXX

Re: Disability Tax Credit and Cost of Nursing Home Care

This is in reply to your letter of October 20, 2005 in respect of the above noted matter. You have asked whether the disability tax credit may be claimed for a person with dementia if the full cost of care in a nursing home is also being claimed by someone as a medical expense.

Our Comments:

The particular situation outlined in your letter appears to relate to a factual one, involving a specific taxpayer. As explained in Information Circular 70-6R5, it is not this Directorate's practice to comment on proposed transactions involving specific taxpayers other than in the form of an Advance Income Tax Ruling. Should your situation involve a specific taxpayer and a completed transaction, you should submit all relevant facts and documentation to the appropriate Tax Services Office for their views. However, we are prepared to offer the following general comments which may be of assistance.

A disability tax credit may be available to an individual with a severe and prolonged mental or physical impairment. Medical expense tax credits are also available to be claimed for various expenses that are considered to be qualifying medical expenses.

The general rule is that the disability tax credit may not be claimed if remuneration for general care in a nursing home was claimed by anyone in computing their medical expense tax credit. This would be the case if medical expenses were claimed under paragraph 118.2(2)(b) for remuneration for the full-time care in a nursing home of a person with a severe or prolonged mental or physical impairment or, under paragraph 118.2(2)(d), of a person who, by reason of lack of normal mental capacity, is dependent on others for their personal needs and care.

However, a disability tax credit may be available to a person in circumstances where medical expenses have been claimed for the "care, or the care and training at a school, an institution or another place of the patient, who has been certified in writing by an appropriately qualified person to be a person who, by reason of a physical or mental handicap, requires the equipment, facilities or personnel specially provided by that school, institution or other place for the care, or the care and training, of individuals suffering from the handicap suffered by the patient" under paragraph 118.2(2)(e). In such circumstances, the fact that the "school, institution or other place" is a nursing home will not preclude the person's claim for the disability tax credit provided the following conditions have been met:

• The payment is made for care or care and training of the individual in an institution, school or another place;
• The payment is for special equipment, facilities or personnel supplied for the specific disability of the individual;
• The individual has been certified by an appropriately qualified person to require the equipment, facilities or personnel specifically provided by the institution; and
• The payment is not for full time attendant care.

Further, remaining requirements for the disability tax credit must also be satisfied. Questions about a particular person's eligibility should be referred to the appropriate Tax Services Office for their views. Additional information about the disability tax credit are available at the CRA's website: http://www.cra-arc.gc.ca/tax/individuals/segments/ disabilities/menu-e.html.

Yours truly,

Robin Maley
Manager
Partnership and Health Section
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch