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 services provided by a physiotherapist and a speech-language pathologist would be considered “job coaching services” or tutoring services for the purpose of the disability supports deduction in a given situation.
Position: Question of fact, but likely not in this case. General comments given regarding job coaching services in the context of the disability supports deduction.
Reasons: Job coaching generally requires on-the-job support that is provided by a person who is engaged in the business of job coaching.
XXXXXXXXXX 2015-059966
Randa El-Kadi
December 18, 2015
Dear XXXXXXXXXX:
Re: Job coaching services and tutoring - disability supports deduction
This is in response to your email of July 17, 2015, in which you ask whether the physiotherapy and speech-language therapy that you received would qualify as tutoring or job coaching services for the purpose of the disability supports deduction under clauses (H) and (K), respectively, of element A in subparagraph 64(a)(ii) of the Income Tax Act (the “Act”).
More specifically, you indicate that you are a self-employed professional and that you sustained a XXXXXXXXXX that resulted in XXXXXXXXXX. You used the services of a physiotherapist and a speech-language pathologist and these services assisted your rehabilitation with activities such as XXXXXXXXXX.
This technical interpretation provides general comments about the provisions of the Act and related legislation (where referenced). It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R6, Advance Income Tax Rulings and Technical Interpretations.
Disability supports deduction versus the medical expense tax credit
Generally speaking, and subject to certain conditions and limitations, the disability supports deduction under section 64 of the Act allows an individual who has an impairment in physical or mental functions to deduct from income for the year the amount of specified disability support expenses (e.g., sign language interpreters and talking textbooks) paid in the year. The expenses must have been incurred to enable the individual to work, to attend a designated educational institution or a secondary school at which the individual is enrolled in an educational program, or to carry on research or any similar work in respect of which the individual received a grant. Additional information can be found in the Income Tax Folio S1-F1-C3: Disability Supports Deduction, available on the Canada Revenue Agency (“CRA”) website at www.cra-arc.gc.ca.
The disability supports deduction may be claimed only by the person with the disability and only if the costs have not been reimbursed by a non-taxable payment or other form of non-taxable assistance. Disability supports that are purchased for purposes other than those specified above may not be claimed under section 64 of the Act. Instead, they may qualify (with the exception of job-coaching services) as a medical expense for the purpose of the medical expense tax credit in section 118.2 of the Act. The medical expense tax credit is a non-refundable tax credit that is applied to reduce the Part I tax liability of an individual. When an expense can be claimed as either a disability supports deduction under section 64 or in calculating a medical expense tax credit under section 118.2, the individual will have to determine whether it is more beneficial for the amount to be claimed as a disability supports deduction or a medical expense tax credit.
Tutoring services in the context of the disability supports deduction
Where an individual has a learning disability or an impairment in mental functions, clause (H) in section 64 of the Act provides a deduction for the cost of tutoring services that are rendered to, and supplementary to the primary education of, the individual. The fees must be paid to a tutor who is ordinarily engaged in the business of providing such services to individuals who are not related to the tutor and a medical practitioner must have certified in writing that the individual is a person who, because of that disability or impairment, requires those tutoring services.
It is a question of fact in each situation whether an individual’s expenses qualify for the disability supports deduction. However, based on the information you provided, we are of the view that it is unlikely that the services you received from the physiotherapist and speech-language pathologist can be said to be “tutoring services” or that these medical practitioners would ordinarily be engaged in the business of providing tutoring services.
Job coaching services in the context of the disability supports deduction
Where an individual has a severe and prolonged impairment in physical or mental functions, clause (K) in section 64 of the Act provides a deduction for “the cost of job coaching services (not including job placement or career counselling services)” paid “to a person engaged in the business of providing such services,” provided that a medical practitioner has certified in writing that the individual is a person who, because of the impairment, requires such services.
The terms “job coaching” and “job coaching services” are not defined in the Act. However, for the purpose of section 64 of the Act, we understand that job coaching for persons with disabilities generally refers to one-to-one personalized support in the workplace, aimed at helping the person achieve one or more of the following:
- learn and accurately carry out job tasks independently;
- learn work-related activities and requirements; or
- adjust to the work environment by accessing accommodations or modifications that are necessary to perform work-related tasks independently.
As such, we broadly understand job coaching services for persons with disabilities to be services that could include:
- a job analysis to identify the job duties;
- a functional assessment of the individual’s strengths, aptitudes and support needs;
- goal-setting as part of a specific plan to foster the individual’s ability to perform job duties progressively on his/her own until completely able to do so, effectively, without assistance; and
- directly observing and evaluating the individual’s job performance and providing immediate feedback and assistance.
It is unclear from the information you gave us whether the services you received from a physiotherapist and speech-language pathologist have the character of job coaching services. It is also a question of fact whether the physiotherapist and speech-language pathologist in your situation were “engaged in the business of providing job coaching services” as required under section 64 of the Act. Additionally, to qualify for the disability supports deduction, a medical practitioner must have certified in writing that you are a person who, because of the impairment, required job-coaching services.
In general, where services are not specifically rendered to assist an individual in achieving work-related objectives, we are of the view that these services would not qualify as job coaching services even if they benefit work performance.
As previously mentioned, where services (other than job-coaching services) provided by a physiotherapist, speech-language pathologist, or another medical practitioner are not eligible for the disability supports deduction, the fees paid to these practitioners may be considered to be medical services under paragraph 118.2(2)(a) of the Act and therefore, eligible for the medical expense tax credit. Information on medical expenses can be found in the Income Tax Folio S1-F1-C1: Medical Expense Tax Credit, which is also available on the CRA website.
We trust that these comments will be of assistance.
Yours truly,
Pamela Burnley, CPA, CA
Manager, Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate
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