19 October 1993 External T.I. 9327215 F - Fees Paid to Senior's Homes as Medical Expense

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.

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Attention:  XXXXXXXXXX

Dear Sirs:

RE:  Fees paid for Residential Care in a Nursing Home or Other Institution

We are replying to your letter of September 15, 1993, concerning the availability of a medical expense tax credit for fees paid to a licensed nursing home or to a home for the aged.

The Long-Term Care Statute Law Amendment Act, 1993 of Ontario (LTCSLA) amended the various provincial acts governing long term care provided in Ontario. Prior to the changes, a licensed nursing home in Ontario only provided extended care facilities whereas charitable and municipal homes for the aged in Ontario provided a mixture of residential and extended care facilities. You advise that an extended care bed refers to accommodation which includes at least one and a half hours of skilled nursing and personal care per day whereas a residential care bed refers to accommodation which includes less than one and a half hours of skilled nursing and personal care per day.

You advise that the three statutes which govern the various types of long term facilities (the Charitable Institutions Act, Homes for the Aged and Rest Homes Act and Nursing Homes Act) will remain separate and the distinct nomenclature (charitable home for the aged, municipal home for the aged and nursing home) will remain intact after the changes introduced by the LTCSLA, but that the rules governing the facilities, the nursing care provided and residents' requirement for such care in each will now be virtually identical. In particular, the fees paid by the resident will be limited to the costs of accommodation since no charges are permitted for the provincially funded care and services. You ask whether the fees paid to these long term care facilities will be eligible for the medical expense tax credit.

Medical expenses for the purpose of the Income Tax Act (ITA) include, under paragraph 118.2(2)(b) of the ITA, amounts paid for full-time care in a nursing home where the patient has a severe and prolonged mental or physical impairment that has been certified in prescribed form by a medical doctor. Paragraph 118.2(2)(d) of the ITA provides similar treatment in respect of fees paid for full-time care in a nursing home for an individual who has been certified by a qualified medical practitioner to be a person who, by reason of lack of normal mental capacity, is and in the foreseeable future will continue to be dependent on others for his or her personal needs and care. Where these requirements are met, it is our view that all regular fees paid to the nursing home, including food, accommodation, nursing care, administration, maintenance and social programming, qualify as medical expenses for the purposes of the ITA. Additional personal expenses which are separately identifiable, such as hairdresser fees, are not allowable expenses.

An individual determination for each patient is required to determine whether the criterion in paragraph 118.2(2)(b) or (d) of the Act is met. It is a question of fact whether a particular facility is a "nursing home" providing "full-time care". It is our view that if the disabled individual does not require constant attendance, whether active or precautionary, then no amount can be included as a medical expense under paragraphs 118.2(2)(b) or (d) of the Act. Consequently, the provincial definition of extended care bed cannot be used as a gauge as to whether the fees paid by a particular individual qualifies under either of these two provisions.

While the Department does not insist that a "nursing home" be licensed as such in order to be considered a nursing home for the purpose of the ITA, it is expected that there be qualified medical personnel in attendance of a calibre and in sufficient numbers to provide care to the resident patients on a 24-hour basis. For example, an institution which has only one nurse on hand at a particular time to serve the needs of a large number of residents would not likely qualify as a nursing home for the purpose of the ITA.

There is another paragraph in the definition of medical expenses which may be applicable for some individuals requiring specialized care in a nursing facility. While the aforementioned provisions only include fees paid for full-time care in a nursing home, paragraph 118.2(2)(e) of the ITA includes in the definition of medical expenses certain fees paid for care or care and training at an institution which has specialized equipment, facilities or personnel specially provided for a particular handicap. These fees only qualify if the patient is a person suffering from that specific handicap and has been certified by an appropriately qualified person to be a person in need of that specialized equipment, facilities or personnel.

We trust our comments will be of assistance to you.

Yours truly,

P.D. Fuoco for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch

c.c.      Provincial and International Affairs Division