14 December 1989 Ministerial Correspondence 74344 F - Medical Expenses

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.

SUBJECT:  Medical Expenses 19(1)

This is in reply to your memorandum of September 13, 1989, inquiring as to whether certain costs would qualify as medical expenses under paragraph 118.2(2)(e) of the Income Tax act (the "Act").

24(1)

Our opinion is that these costs do not qualify as medical expenses.  With regard to capital cost allowance, this is not "an amount paid" as required in the preamble to subsection 118.2(2) of the Act.  In addition, in order for the capital cost allowance and also the other costs to be considered as medical expenses under paragraph 118.2(2)(e) of the Act, they would have to be "for the care...at a school, institution or other place of the patient."

There are two issues which need to be addressed here.  The first is whether these expenses are for the "care" of 19(1).  We have stated previously that, in the context of a nursing home or a residential school or institution. care includes accommodation.  It could therefore, be argued that the costs in question are for 19(1) accommodation and that they are necessarily incurred in the operation of the house.  However, we would drawn a distinction between fees paid to a residential school or institution, a portion of which are meant to cover the cost of accommodating the patient and coast such as property taxes, etc., in the case here which are paid to another party which is not responsible for providing the accommodation.  We believe that in the latter case, the costs are too remotely connected to the provision of "care".

The second issue is whether the house built to accommodate 19(1) disability fits within the term "school, institution or other place".  We have stated in the past that the cost of a separate apartment rented specifically for a dependant child for valid medical reasons is nevertheless a personal expense.  However, in these cases, the apartment in question and did not provide any special amenities.  the situation here is somewhat different in that the house is specifically designed to accommodate 19(1) disability.  Clearly the house is not a school or institution, but is it an "other place"?  We could find no administrative or judicial precedents or a general word on this question.  However, as a rule of interpretation, the meaning of a general word will often be coloured by the more specific words around it.  We are therefore of the opinion that "other place" in paragraph 118.2(2)(e) means a place similar to a school or institution.  A self-contained domestic establishment, even though specially designed, is not a place similar to a school or institution.

We trust the above is of assistance to you.

B.W. DathDirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch