10 April 1996 Internal T.I. 9608706 - MEDICAL EXPENSES - TUITION FEES, XXXXXXXXXX

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 tuition fees paid to a learning centre for gifted children qualify as medical expenses under paragraph 118.2(2)(e) of the Act.

Position:

Tuition fees to the XXXXXXXXXX do not qualify.

Reasons:

Giftedness in children is not considered a "mental handicap" under the ordinary meaning of that term.

April 10, 1996

	Appeals & Referrals Division	HEADQUARTERS
P. J. Murphy	J.A. Szeszycki
	Section Chief	(613) 957-8953
	Income Tax Appeals
		960870

Medical Expenses - XXXXXXXXXX

This is in reply to your memorandum of March 7, 1996 in which you requested our views on the deductibility of payments made, in the form of tuition fees, to the XXXXXXXXXX as a medical expense under paragraph 118.2(2)(e) of the Income Tax Act (the "Act").

The XXXXXXXXXX is a private educational institution that deals exclusively with those children who have been identified as gifted learners or potentially gifted learners. It is our understanding that application for acceptance as a student at XXXXXXXXXX must be accompanied by a professional assessment of the child's intellectual potential. The professional assessment includes a series of standard tests designed to score the child's intellectual capability and cognitive skills. The professional is also in a position to identify the existence of any learning disabilities or behavioural problems.

In order for fees paid to the XXXXXXXXXX to qualify as a medical expense under the provision of paragraph 118.2(2)(e) of the Act the payments must be shown to be in respect of the care and training of an individual who has been certified by an appropriately qualified person as requiring, due to a physical or mental handicap, the facilities, equipment or personnel specially provided by XXXXXXXXXX for the care and training of individuals with that kind of physical or mental handicap.

The key elements of the provision include the existence of a mental or physical handicap, the certification by the appropriate medical practitioner that the individual has such a handicap and that the individual requires the facilities, equipment or personnel that is provided by the institution especially for the care and training of individuals with such handicaps.

Consequently, the specific issues in this case are (i) whether giftedness in a child is considered a mental handicap for the purposes of the Act, (ii) whether the handicap has been assessed by an appropriately qualified person and (iii) in being recommended by the qualified professional, it is recognized that the institution provides the facilities, equipment or personnel specially required for the care and training of individuals with such handicaps. In our view, consideration of issues (ii) and (iii) rely on the resolution of issue (i) in favour of the taxpayer.

In the arguments submitted by XXXXXXXXXX and the parents of its students, the contention is made that the relevant provision of the Act is being interpreted too narrowly by those who administer it. Citing the landmark decision in Stubart Investments Limited v. the Queen 84 D.T.C. 6305, as further explained in Corporation Notre-Dame de Bon-Secours v. Communaute Urbaine de Quebec et al 95 DTC 5017, XXXXXXXXXX argues that it was the legislated intent of paragraph 118.2(2)(e) of the Act to provide tax relief to individuals who incur extraordinary medical expenses, that to narrowly interpret the term "mental handicap" would be to defeat the purpose of the provision, particularly in light of the historical trend of expanding the medical expense provisions as a whole. Noting that the term "handicap" is not defined in the Act itself, XXXXXXXXXX argues that the term's ordinary meaning would encompass the negative side-effects of being a gifted child so that a conclusion can reasonably be drawn that such a child is mentally handicapped. He refers to the dictionary definition of "handicap" as being broad enough to make that inference.

It is our opinion that the search for the ordinary meaning of a word may start with the dictionary definition but it does not necessarily end there. Ultimately, the ordinary meaning assigned to a word must reflect what the public generally understands it to be. In our view, to suggest that the ordinary meaning of "mental handicap" would include giftedness would not reflect the public's general perception of that term.

We note that in the articles offered by XXXXXXXXXX in support of his position, written by qualified professionals in the field of psychology, the authors fall short of referring or even implying that giftedness itself is a mental handicap. The articles make a clear distinction between the "gifted" and the "learning disabled gifted". The existence of this separate category of gifted individuals strongly suggests, however, that gifted children are not immune to learning disabilities or behavioural problems.

As a result, we would agree with your view that each case should be examined for the presence of recognized learning disabilities or behavioural problems of sufficient severity to warrant consideration for the credit under this provision. We would caution, however, that if other mental handicaps are determined to exist the other essential criteria under paragraph 118.2(2)(e) of the Act must be met. From a review of its literature, the XXXXXXXXXX would not appear to be an institution that specially provides the equipment, facilities or personnel required to care for individuals with specific learning disabilities. In addition, of the 38 students included in this enquiry, only with respect to one was there an assessment that made reference to attention deficit disorder. Two other assessments made vague references to learning difficulties. In both of these respects, Somers v. MNR 79 DTC 21 is relevant since, in that case, the court was not satisfied from the testimony presented that the difficulties experienced by the student in the public school constituted a mental handicap. As well, the school itself was not one described in the medical expense provision.

If we can be any further technical assistance please contact the writer.

Roy C. Shultis
Interim Director General
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch