16 June 1994 Internal T.I. 9410597 - 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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

A "Continuous Positive Airway Pressure" machine provides air directly to a patient through a mask. An attachment to the machine humidifies the air. Is the attachment described in Regulation 5700?

Position TAKEN:

The attachment is considered to be a part of the machine. Assuming the machine satisfies the "designed exclusively" requirement in the Regulation, the attachment would be considered to be a qualified medical expense as all the other requirements seem to be satisfied.

Reasons FOR POSITION TAKEN:

The position is based on the information provided.

							June 16, 1994

	Charlottetown District Office		Head Office
Mrs. B.J. Crosby				Rulings Directorate
	Acting Assistant Director		M. Eisner
	Client Assistance				(613) 957-8953

							941059

Eligible Medical Expenses

This is in reply to your memorandum of April 15, 1994 in which you asked us for our comments on whether the cost of a certain device is an eligible expense for the purposes of the medical expense tax credit. The device is used by a XXXXXXXXXX (the Patient).

The Patient suffers from obstructive sleep apnea (i.e., her airway becomes blocked at night). As a consequence of this disorder, she purchased a "Continuous Positive Airway Pressure" (CPAP) machine which keeps her airway open by pushing a continuous airflow into an airtight mask which fits over her nose and mouth. When she first started using the CPAP machine, she did not need as high a setting for the air pressure as she now requires. However, with the increased setting, her physician (XXXXXXXXXX) prescribed a Heated Respiratory Humidifier (HRH). The HRH does not stand alone as a humidifier but attaches to the CPAP machine by a tube. The tube takes the airflow from the CPAP machine into the humidification chamber and then within the chamber the air is heated and moistened with distilled water. Then the air leaves the chamber through another tube which is connected to her mask. She states that this humidifier attachment would not be used as a room humidifier and that some CPAP machines come with a built in humidifier.

Our Comments

In the comments that follow, unless otherwise stated, all statute references are to the Income Tax Act S.C. 1970-71-72, c.63 as amended, consolidated to June 10, 1993 (the "Act").

With respect to the above situation, paragraph 118.2(2)(m) of the Income Tax Act (the Act) refers to devices or equipment not described elsewhere that are prescribed in section 5700 of the Income Tax Regulations. In addition, the devices must be prescribed by a medical practitioner and meet such conditions as may be prescribed in Regulation 5700 as to its use or the reason for its acquisition.

In relation to the above requirements, paragraph 5700(c) refers to a "device or equipment, ... designed exclusively for use by an individual suffering from a severe chronic respiratory ailment ..., but not including ... (a) humidifier".

With respect to the above excerpt, you enclosed a definition of the term humidifier, which defines it to be "An apparatus for increasing the humidity in an enclosed space, as a room or greenhouse" and asked us to consider whether the HRH is a humidifier. In this regard, it seems to us that the HRH would not satisfy that definition of humidifier since it is not designed to be used to moisten a space such as a room or greenhouse. We also note that we considered several other definitions of "humidifier" and reached the same conclusion. In addition, it seems that the HRH can be regarded as being a part of the CPAP machine (in other words, there is only one device for the purposes of Regulation 5700(c) which is the CPAP machine). In this regard, the information provided to us indicates that the HRH is attached to the CPAP machine and is integral to the enhanced functioning of that machine in respect of the Patient. In addition, it has been mentioned that in some instances an HRH is built into the CPAP machine. It is, accordingly, our view that the courts would regard the CPAP machine as well as the HRH attached to it as being a single device with the result that it would be treated in the same manner as a CPAP machine with a built in HRH.

As a consequence of the above comments, it would follow that the HRH should not be considered to be a "humidifier" for the purposes of Regulation 5700(c) and that in order for the cost of the HRH to be an expense eligible for the medical expense credit, the CPAP machine itself must be described in paragraph 118.2(2)(m) of the Act and Regulation 5700(c).

With respect to the CPAP machine, the above excerpt from Regulation 5700(c) indicates that a device needs to have been "designed exclusively" for use by an individual suffering from a severe chronic respiratory ailment. On the assumption that the CPAP machine satisfies this requirement and since it appears that all the other requirements have been satisfied, it is our view that the cost of the HRH in respect of the Patient is an eligible medical expense.

If further technical assistance is required, we would be pleased to provide our views.

P.D. Fuoco
Section Chief
Personal and General Section
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch