15 February 2006 External T.I. 2005-0163161E5 - Medical Expense Tax Credit - Stair Lift

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: Is the cost of installing a stair lift in the home of a disabled adult child a qualifying medical expense to the parent if the child has multiple sclerosis?

Position: Question of fact. Will likely qualify if the child is a dependant of the parent within the meaning of subsection 118(6) of the Act.

Reasons: Words of the Act.

XXXXXXXXXX
									2005-016316
February 15, 2006

Dear Sir:

Re: Medical Expense Tax Credit
Installation of Chair Lift

This is in response to your letter, which was forwarded to us for reply by the XXXXXXXXXX Tax Centre and received on December 12, 2005. You are seeking our confirmation as to whether the costs you have incurred to install a stair lift in your daughter's home may be claimed in computing your medical expense tax credit. We discussed this matter by telephone on February 22, 2006 (XXXXXXXXXX/Maley).

As we understand it, you and your wife own two units within a townhouse complex, one of which is your home, the other your daughter's home. (Your daughter legally holds title to 1/1000 of her unit.) Your daughter is an adult with multiple sclerosis. Due to her illness, your daughter is no longer able to work. She receives a CPP disability pension, which is not sufficient to meet her expenses. You and your wife assist her as you can, in part by providing her a low-cost place to live.

This year, your daughter's mobility reached a stage where she could not safely go up and down stairs. As her income was not sufficient to make the necessary accommodations to her home, you paid to have a stair lift installed in her home. This modification has enabled your daughter to remain mobile within her home, and hence enabled her to continue to live on her own.

The Income Tax Act ("the Act") allows individuals to claim a medical expense tax credit based on the sum of their qualifying medical expenses. Subsection 118.2(2) of the Act provides the list of expenditures that may qualify for the medical expense tax credit. An expenditure that is on this list may be claimed by an individual provided that the "patient" is the individual who incurs the expense, the individual's spouse or a dependant of the individual.

In other words, the expense is a qualifying medical expense if two things can be established. First, the cost of the installing the stair lift must be on the list. Second, your daughter must be your "dependant" for purposes of the medical expense tax credit. As discussed in our telephone conversation yesterday, we cannot make this determination. If you want confirmation in this regard before filing your tax return, you may refer the question, with copies of all relevant documents, to the Client Services Division of your local Tax Services Office. However, we are able to make the following general comments which may help clarify whether you are entitled to include all or part of the cost of your daughter's stair lift in computing your medical expense tax credit.

The list of qualifying expenditures includes, in paragraph 118.2(2)(l.2), "reasonable expenses relating to renovations or alterations to a dwelling of the patient...to enable the patient to gain access to, or to be mobile or functional within the dwelling".

If for some reason, the stair lift at issue does not satisfy the criteria in paragraph 118.2(2)(l.2), the list of qualifying medical expenses also includes, in paragraph 118.2(2)(m), amounts in respect of any "device or equipment for use by the patient" that is prescribed by regulation, is prescribed by a medical practitioner for the patient's use, and is not described in any other paragraph on the list. The related regulations include, in paragraph 5700(m) of the Income Tax Regulations, a device or equipment that is a "power-operated lift...designed exclusively for use by, or for, a disabled individual to allow the individual access to different areas of a building".

We think it likely that the stair lift you had installed in your daughter's home satisfies the description in paragraph 118.2(2)(l.2), referred to above. If we are correct in that regard, then a reasonable amount paid to install the stair lift would be a qualifying medical expense to you if your daughter is your "dependant" for purposes of the credit. This would be the case if your daughter was dependent on you for support at any time in the year. It is not necessary that your daughter live with you for her to be your dependant.

Whether or not one person is dependent upon another depends upon their particular circumstances. In general terms, support involves the provision of the basic necessities of life such as food, shelter and clothing. Support may be given voluntarily or pursuant to a legal commitment. As your daughter receives a disability pension, you must be able to show that her income was insufficient to fully meet her basic needs and that she had to rely on the support you provided. Consideration would generally also be given to the amount of support provided in assessing whether one person is dependent on another.

We hope that the foregoing comments are of assistance to you.

Yours truly,

Robin Maley
Manager
Partnerships and Health Section
Business and Partnerships Division
Legislative Policy and Regulatory Affairs Branch