16 January 2009 External T.I. 2008-0291121E5 - respite care - medical

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 respite care qualifies for METC

Position: Question of fact.

Reasons: It depends on the nature of the individual's disability and whether the respite care facility is a nursing home or another type of facility.

XXXXXXXXXX 							2008-029112
J. Gibbons, CGA
January 16, 2009

Dear XXXXXXXXXX :

Re: XXXXXXXXXX (the "Facility")

This is in reply to your letters dated July 22 and November 27, 2008, concerning whether amounts paid by an individual to the Facility would qualify as medical expenses for purposes of the medical expense tax credit ("METC"). The Facility has XXXXXXXXXX beds and provides "respite care", namely short-term 24-hour care provided to an individual with a significant disability to provide temporary relief to the individual's primary caregivers.

Our Comments

The list of medical expenses that qualify for the METC are described in detail in subsection 118.2(2) of the Income Tax Act (the "Act"). Reference may also be made to Interpretation Bulletin IT-519R2 (Consolidated), Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, which contains a description of the most common medical expenses. This bulletin can be accessed at: www.cra.gc.ca.

You indicated in your letter that the Canada Revenue Agency denied an METC claim by one of your clients for the cost of staying at the Facility. As discussed in paragraphs 23 through 30 of IT-519R2, there are various provisions for claiming care in a facility as a METC, depending on the nature of an individual's disability and the type of facility providing the care. For example, care in a facility that qualifies as a "nursing home" might qualify under paragraph 118.2(2)(b) or (d) of the Act, depending on whether the individual qualifies for the disability tax credit or whether the individual lacks normal mental capacity. On the other hand, if a facility does not qualify as a "nursing home", amounts paid to the facility that relate to remuneration for attendant care or supervision, depending on the facility, might qualify under one of the other provisions in the Act, as described in IT-519R2. In this case, the receipt from the facility would have to differentiate the amounts that pertain to actual remuneration for attendant care or supervision, as the case may be, from other non-eligible costs, such as lodging costs.

Since the term "nursing home" is not defined in the Act, we rely on the ordinary meaning of the term in determining if a particular facility qualifies as a nursing home. Generally, we consider a nursing home to be an establishment that provides full-time maintenance or nursing care for persons (ex. 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.

Without knowing the particulars of your client's claim, we cannot offer more definitive comments. I trust these comments will be of assistance.

Yours truly,

G. Moore
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch