18 January 1990 Income Tax Severed Letter 5-9035 - [Medical Expenses - Paragraph 118.2(2)(c) of the Income Tax Act (the "Act")]

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.

J.D. Jones (613) 957-2104

Attention: XXXX

JAN 18 1990

Dear Sirs:

Re: Medical Expenses Paragraph 118.2(2)(c) of the Income Tax Act (the "Act")

This is in reply to your letter of October 16, 1989, wherein you requested our opinion as to whether certain expenses would qualify as a medical expense pursuant to paragraph 118.2(2)(c) of the Act.

It is our understanding the hypothetical situation as outlined in your letter may be summarized as follows.

Patients have been diagnosed as having Alzheimer's disease which causes severe memory loss and other mental disorders. For their own safety patients cannot be left alone for any extended period of time. The mental disorders may or may not be accompanied by physical disorders such as cataracts or confinement to wheelchairs. The patients are certified by a medical practitioner to be persons who, by reason of mental or physical infirmity, are and are likely to be for a long-period of indefinite duration, dependent upon others for their personal needs and care and who, as a result thereof, require a full- time attendant in order to maintain them at home. The attendants are 18 years of age or older and are not related to the patients. The attendants watch over the patients in their homes to ensure that they do not harm themselves and to assist them in their daily activities. The care is generally provided by attendants who are employees of taxable Canadian corporations and whose qualifications vary with the needs of the patients. In certain instances the individuals will be registered or practical nurses; however, for the most part care is provided by individuals who have experience in this area but no formal professional training or licence. The payments are made to the corporations that employ these individuals. The attendants are usually not required to be present 24 hours per day but are usually in attendance for most of the patients waking hours.

It is our view that the phrase "full-time" is not reasonably intended to place a requirement of a minimum time spent in attending a "cared-for" person by a particular attendant but rather it implies the constant care and attendance required by an individual by reason of the injury, illness or affliction of such individual. The requirement for constant care and attendance can be satisfied in whole or in part by a person(s) employed for that purpose in combination with other individuals (such as spouse, parent or other related persons) who may be in attendance during hours that their other commitments permit.

This view is supported in the Tax Appeal Board case of Wakelyn v. MNR

71 DTC 35 in which member J.0. Weldon placed an interpretation that the phrase "one full-time attendant" should reasonably be interpreted not to mean only one attendant looking after the "cared-for" person day-in, day-out but rather that up to several attendants could be utilized over a specified period as long as the claim for tax purposes includes only one attendant for any given portion of that period. The reasons for judgement further state "that there is nothing in the above provision (then subparagraph 27(1)(c)(iv)) which purports to suggest that every attendant brought in to assist in taking care of a physically helpless person should receive some remuneration ... or for that matter, should work a whole or partial shift of so many hours per day". Furthermore, as part of the judgment rendered in Witthuhn v. MNR

57 DTC 174, member W.S. Fisher states "... the basic intention of Parliament must have been to permit a deduction where an individual ... necessarily required the services of a full-time attendant by reason of the illness, infirmity or affliction of such individual".

Based upon the above, it is our view that a home care provider may, in certain circumstances, be viewed as a "full-time attendant" for the purposes of paragraph 118.2(2)(c) of the Act. It is also our view that it appears the expenses incurred by an individual in such circumstances may qualify as medical expenses pursuant to paragraph 118.2(2)(c) of the Act.

We trust our comments will be of assistance.

Yours truly,

for Director Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch