22 November 1995 External T.I. 9525545 - ATTENDANT CARE AND NURSING HOME CARE

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:

An individual and/or the patient (the individual's spouse) pay amounts to a nursing home in respect of the patient and the individual and/or the patient also pay amounts to an attendant who has been hired to care for the patient. Are both types of costs qualifying medical costs (attendant care - 118.2(2)(b); nursing home care 118.2(2)(d))?

Position TAKEN:

This would appear to be the case subject to the certification requirement set out in each of the two paragraphs.

Reasons FOR POSITION TAKEN:

The position is based on comments in file 903963 and the facts of the case.

            November 22, 1995

      North York Tax Services Office      HEADQUARTERS
      Client Assistance M. Eisner
Ms. Jamie Walker  (613) 957-8953
      Assistant Director
            952554

Medical Expenses

As mentioned to you in our telephone conversation on November 15, 1995 (Eisner/Walker), we have recently received a letter from a XXXXXXXXXX (the Taxpayer) concerning medical expenses that have been claimed in respect of XXXXXXXXXX (the Patient). The Taxpayer and the Patient are legally married.

The circumstances of the Patient are set out below. In connection with those circumstances, the Taxpayer and/or the Patient for the past four or five years treated the cost of attendant care as well as the cost of nursing home care as being qualifying medical expenses (the costs were paid by the Taxpayer and/or the Patient). However, during this period of time, the Taxpayer has been concerned whether both types of costs are eligible to be treated in that manner. As a result of this concern, the Taxpayer has mentioned to us in a telephone conversation that, during 1995, she resubmitted T-1 returns on the basis that only one of the two types of costs were qualifying medical expenses. As a result, the Department proceeded to process reassessments. However, since the Taxpayer was still unsure whether both costs qualified for the medical expense tax credit, she communicated with this branch by letter to asking for information on whether or not the two types of costs are qualifying medical expenses. A copy of this letter is attached.

As discussed with you in our telephone conversation, we are referring this matter to your office for the purposes of determining whether the Taxpayer and/or the Patient are entitled to treat both types of costs as being qualifying medical expenses under paragraphs 118.2(2)(b) and (d) of the Income Tax Act (the Act). However, as indicated in our telephone conversation, we are providing you with our comments on these provisions in relation to the information provided to us in telephone conversations with the Taxpayer and in her letter. We also note that we were not in a position to comment on the certification requirement set out in each of the provisions.

The Patient suffered a severe stroke in 1988 which resulted in paralysis in respect of one side of his body. Since that time, he has been confined to a bed or wheelchair as he has not been able to walk. He is unable to dress himself and requires assistance with respect to feeding and elimination (bowel and bladder functions).

Part of the Patient's medical condition is attributable to the fact that the stroke caused him to be mentally impaired. For example, it is our understanding that his mind would be unable to absorb two simple directions such as putting an article (e.g., a box of tissues) on a table and then moving another article from the table to a waste basket beside the table. A further indication of his mental condition is that, while he is physically capable of feeding himself, he requires assistance because he eats too fast and may choke. His personal affairs are managed by the Taxpayer who has been granted a power of attorney in that regard. Over the years, the Patient's condition has been gradually deteriorating.

The Patient receives nursing home care from the nursing home in which he lives. In addition, an attendant, who works 441/2 hours a week, has been hired to provide the Patient with care as a consequence of the ratio of nursing home staff to patients.

Under paragraph 118.2(2)(b) of the Income Tax Act (the Act), an individual may include as qualifying medical expenses in respect of a patient (i.e., the individual, his or her spouse or a qualifying dependent) amounts paid for one full-time attendant in the following circumstances:

(a)the attendant is an individual other than a spouse or a person who is under 18 years of age;

(b) the patient is an individual with a prolonged mental or physical impairment that has lasted or can reasonably be expected to last at least 12 months. The patient must also be markedly restricted in his or her ability to perform basic activities of daily living. Basic activities of daily living are seeing, walking, speaking, perceiving, thinking and remembering, hearing, feeding and dressing, and eliminating body waste.

(c) the individual must be properly certified with respect to (b) above. This involves the completion of form T2201.

We have been advised by the Taxpayer that the attendant is not under the age of 18 years. Subject to the certification requirement in (c), it seems that, on the basis of the information provided to us, the Department can regard the cost of attendant care as being a qualifying medical expense under paragraph 118.2(2)(b) of the Act.

Where an individual makes qualifying payments in respect of a patient for full-time attendant care and also makes payments to a nursing home for full-time care, the payments made to the nursing home may also be qualifying medical expenses. In order for this to occur, the patient must be a person who is and will in the foreseeable future continue to be dependent upon others for his/her personal needs as a result of a lack of normal mental capacity. Such a condition must be certified by a medical practitioner. On the basis of the information provided to us, it also seems that the Department can also regard the cost of the nursing home care, subject to the certification requirement, as being a qualifying medical expense for the purposes of paragraph 118.2(2)(d).

Kindly advise the Taxpayer of your conclusion in respect of the above matter.

Should you require any further technical assistance, we would be pleased to provide our views.

P.D. Fuoco
Section Chief
Personal and General Section
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch