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:
whether a $500 allowance paid to an employee providing foster care is included in income
Position TAKEN: allowance will be exempt by reason of 81(1)(h) provided it is reasonable in relation to the child's projected needs
Reasons FOR POSITION TAKEN:
while employment income is not exempt under 81(1)(h), the allowance will be exempt on the basis that the payment is an indirect payment of an amount which the child would otherwise receive as social assistance -see e9325226
February 10, 1995
Source Deductions Division Rulings Directorate
André Bissonnette A. Humenuk
Director 957-8953
Attention: P.M. Paquette
CPP/UI Programs Division
943172
Amounts paid to Group Home Parents engaged in Foster Care
We are replying to your memorandum of December 2, 1994 in which you ask for our comments on certain amounts paid to individuals providing foster care in a group home situation.
You are satisfied that the individuals in question are providing the care as employees and that the $1,500 per month and value of the free accommodation are taxable under section 5 and 6 of the Act. However, the employees are also provided with a $500 per month allowance in respect of each child under their care. While the allowance is non-accountable, it is intended that it be used to pay for expenses relating to the foster child.
It is our view that any payment made by the non-profit organization to its employees for expenses incurred on behalf of the cared-for person is not required to be included in the employee's income. This is because the specific payment is determined with reference to the cared-for person's needs and does not form part of the payment of salary which is intended to compensate the caregiver for the services provided. Provided that the $500 allowance is reasonable in respect of the child's projected needs, it is our view that the allowance could by excluded from income by virtue of paragraph 81(1)(h) of the Act.
B.W. Dath
Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch
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