8 June 1995 External T.I. 9429145 - EMERGENCY HOME FOR CHILDREN IN CARE OF SOCIAL SERVICES

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: emergency home fees: are they exempt under para 81(1)(h)?

Position TAKEN: fees for operation a foster child emergency home in the taxpayer's home is exempt from income even though there are periods during which no child is in the taxpayer's home

Reasons FOR POSITION TAKEN:

-notwithstanding the quantum paid in BC, such fees are the fees envisioned as bed reservation fees described in the technical notes. Therefore the amt can be considered to be an amount which would ordinarily be paid to the caregiver on account of social assistance if the child were in her home. Her home is maintained for the use of up to 4 foster children & thus the income is exempt

A. Humenuk
XXXXXXXXXX		942914

June 8, 1995

Dear XXXXXXXXXX:

Re: Bed Reservation Fees

Your letter of October 24, 1994 addressed to the Honourable David Anderson, Minister of National Revenue, has been referred to us for reply. We apologize for the delay in our response.

You have asked for clarification as to whether payments from the British Columbia Ministry of Social Services to you for the operation of an emergency shelter in your home would be required to be included in income. We understand that your arrangement with the Ministry to provide such care is not yet finalized.

Under paragraph 81(1)(h) of the Income Tax Act, payments to an individual for the care of foster children or adults who are incapable of caring for themselves will generally be excluded from income where:

a)the cared-for person is unrelated to the individual,

b)the cared-for person is living in the individual's home or the individual's home is maintained for use as the residence of the cared-for person and

c)the payment is made under a social assistance program of a province or of Canada.

Payments made by a provincial government to an individual to operate an emergency shelter in his or her home for foster children would be excluded from income under this provision since such payments are considered to be social assistance payments ordinarily made on the basis of a means, needs or income test. This would include amounts commonly referred to as bed reservation fees but would not include salary or wages paid under a contract of employment.

We trust this is the information you require.

Yours truly,

P.D. Fuoco
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

c.c. Paul Emberley

Ministerial Correspondence Section