9 April 1996 Income Tax Severed Letter 9606545 - Rental payments as 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:

Whether rental payments made qualified as a medical expense for purposes of the medical expense tax credit in circumstances where payer had increasing degrees of blindness and dementia.

POSITION:

The payments do not qualify as medical expenses.

REASONS:

The residence would not qualify as a nursing home nor the payments as remuneration for a full-time attendant.

960654
XXXXXXXXXX J.A. Szeszycki

Attention: XXXXXXXXXX

April 9, 1996

Dear XXXXXXXXXX

Re: Medical Expense and Disability Tax Credits

This is in reply to your letter of February 12, 1996, in which you requested our views as to the eligibility of the rental costs incurred in 1995 by your father, the late XXXXXXXXXX for consideration in the computation of the medical expense tax credit. You have also asked whether, in the event that the rental costs are eligible, a claim for the disability tax credit would be more beneficial under the circumstances.

As we understand the circumstances, XXXXXXXXXX in the last two years of his life, was suffering from increasing degrees of dementia as well as blindness. It was recommended by his physician that he live in a place where he could get some assistance with many of the day-to-day necessary activities such as taking medication, meals, bathing, etc. It would also provide him with security as most services he needed would be either within the building or close by.

There are several paragraphs within the medical expense tax credit provisions which are relevant to the circumstances described above. We have reviewed each of these provisions to determine whether it may have application. As you indicated, XXXXXXXXXX is not a licensed nursing home. While a facility is not required to be licensed in order to qualify as a nursing home for tax credit purposes, it must have the equivalent features and characteristics of a nursing home. To qualify as a nursing home it must have, for example, qualified medical personnel in attendance and in sufficient numbers to provide care to the residents on a 24-hour basis. XXXXXXXXXX does not appear to provide the level of coverage that could be viewed as "full-time care in a nursing home", as is required in the specific provision of the Income Tax Act.

Alternatively, we considered whether the payment would qualify as "remuneration for one full-time attendant" within the meaning intended by the Act. It is our view, however, that rental payments, including those that might indirectly cover the costs of occasional assistance by an attendant would not be considered as remuneration for this purpose.

There is also a provision which permits, for the purposes of the tax credit, the costs of care at a school, institution or other place of a person where that person is certified by a physician as requiring the equipment, facilities, or personnel specially provided therein for the care of a person suffering from the particular handicap. XXXXXXXXXX appears to feature services that would be generally available in a seniors residence and not specific to any particular handicap.

We conclude, from our review, that the rental payments would not qualify as medical expenses for the purposes of the medical expense tax credit. We regret that our response cannot be more favourable.

Yours truly,

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