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 taxpayer's home is a "nursing home" under 118.2(2)(b), or an "other place" under 118.2(2)(e). Whether several attendants qualify as one full-time attendant under 118.2(2)(c).
Position: No. No. Yes.
Reasons: Nursing homes, schools and institutions are normally facilities of a public character that offer services to individuals who are not related to the facility owner/operator. An individual's private home is not such a facility. "One full-time attendant" may apply where there are several attendants provided only one attendant is present at any given time.
XXXXXXXXXX Amanda Riddell, LL.B
February 5, 2008
Dear XXXXXXXXXX :
RE: XXXXXXXXXX - Medical Expenses - At Home Care
This is in response to your letter of September 25, 2007 and your facsimile of November 8, 2007 wherein you asked whether certain care costs were eligible expenses for the purposes of the medical expense tax credit under paragraph 118.2(2)(b), (c) or (e) of the Income Tax Act (the "Act"). We also acknowledge our subsequent telephone conversations (XXXXXXXXXX/Riddell), your letter of October 10, 2007, your January 18, 2008 emails including the digital photographs, and the three DVDs.
It is my understanding that your client, as a result of being struck by a car at the age of XXXXXXXXXX in XXXXXXXXXX, is a permanent quadriplegic and ventilator dependent individual. Due to her condition, she qualifies for the disability tax credit under section 118.3 of the Act. Since her discharge in XXXXXXXXXX she has resided in her parents' home. Your client is now XXXXXXXXXX years old and she occupies the entire main floor of her parents' house (her parents reside exclusively on the second floor). The main floor has been completely adapted to accommodate your client's personal care requirements. The space includes, for example, a hospital bed, a specially adapted washroom, a ceiling wheelchair track lifting system, a medical supply room and a nursing station.
To meet her physical care requirements, your client has a group of XXXXXXXXXX attendants providing 24-hour personal and nursing care on a rotational basis (with only one attendant present at any given time). The total cost for this care is approximately $XXXXXXXXXX per year. In addition to the attendants, your client has XXXXXXXXXX home health aides who provide care relating to ventilation and other equipment issues that are particularly relevant when the taxpayer is sleeping or being transported. The home health aides provide about 12 hours of additional service each day at a cost of approximately $XXXXXXXXXX per year. You have asked whether the costs of the attendants and the home health aides (the "Costs") would qualify for the medical expense tax credit under paragraph 118.2(2)(b) on the basis that your client's home is a "nursing home", or alternatively, under paragraph 118.2(2)(e) on the basis that your client's home is an "other place". You have also asked whether the cost of the XXXXXXXXXX attendants would instead qualify under paragraph 118.2(2)(c) as remuneration for one full-time attendant.
The CRA's general views regarding the medical expense tax credit are contained in our Interpretation Bulletin IT-519R2 (Consolidated), Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction.
Section 118.2 of the Act provides rules for determining the amount that may be claimed, as a tax credit, in respect of medical expenses. Subsection 118.2(2) of the Act contains a list of expenditures that qualify as medical expenses. Your questions relate specifically to paragraphs 118.2(2)(b), (c) and (e), each of which are discussed below.
1. Paragraph 118.2(2)(b) - Nursing Home Care
Under paragraph 118.2(2)(b), a qualifying medical expense includes remuneration paid for the cost of full-time care in a nursing home for a patient who has a severe and prolonged physical impairment, provided certain conditions are met.
You have asked whether the Costs would qualify for the medical expense tax credit under paragraph 118.2(2)(b) on the basis that your client's home is a nursing home. The term "nursing home" is not defined in the Act, and therefore, in determining if a particular facility qualifies as a nursing home, we rely on the ordinary meaning of the term. Generally, we consider a nursing home to be an establishment that provides maintenance or nursing care for persons (as the aged or chronically ill) who are unable to care for themselves. While we accept that a particular place need not be a licensed nursing home, we are of the view that it must have the equivalent features and characteristics of a nursing home. For example, a nursing home is normally a facility of a public character that offers 24-hour nursing care to individuals who are not related to the facility owner/operator.
Your client's home, in our view, is not such a facility. Rather, it is a private home that has been modified to meet the needs of its owner/occupant. As such, we would not consider the Costs to be remuneration for full-time care in a nursing home for the purposes of paragraph 118.2(2)(b).
2. Paragraph 118.2(2)(c) - Full-time Attendant at Home
Paragraph 118.2(2)(c) allows an individual to include, as a qualifying medical expense, remuneration paid for one full-time attendant for a patient in a self-contained domestic establishment in which the patient lives, provided certain conditions are met.
As indicated in paragraph 30 of IT-519R2, the expression "one full-time attendant" would apply where several attendants provide care to a patient so long as there is only one attendant for any given period of time. Based on the facts provided, it appears that the remuneration for the XXXXXXXXXX attendants who provide 24-hour personal and nursing care on a rotational basis would qualify as remuneration for one full-time attendant to the extent that the amounts are reasonable. The additional cost of the home health aides, however, would not be an eligible medical expense under paragraph 118.2(2)(c) since it is limited to one full-time attendant.
3. Paragraph 118.2(2)(e) - School, Institution or Other Place
Paragraph 118.2(2)(e) allows an individual to include, as a qualifying medical expense, amounts paid for the care or the care and training, of a patient at a school, institution or other place when an appropriately qualified person has certified that patient to be a person who, by reason of a physical or mental impairment, requires the equipment, facilities or personnel specially provided by that place.
You have asked whether the Costs would qualify for the medical expense tax credit under paragraph 118.2(2)(e) on the basis that your client's home is an "other place". Since the term "other place" is not defined in the Act, its meaning must be taken from the words preceding it, namely, "school" and "institution". However, these two words are likewise not defined in the Act, and so we must rely on their ordinary meanings. The words "school" and "institution" are normally understood to mean facilities of a public character that offer services to individuals who are not related to the facility owner/operator.
In our view, your client's home is not such a facility, but rather a private home adapted to the needs of its owner/occupant. For this reason, we would not consider the Costs would be amounts paid for care or care and training at a school, institution or other place under paragraph 118.2(2)(e).
While we regret that we could not give you a more favourable response, we hope that the foregoing comments have been of assistance.
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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