7 November 1996 External T.I. 9626635 - 118.3

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 patient on 3x week hemodialysis should qualify for the disability tax credit

Position:

yes

Reasons:

if an individual is unable (or requires an inordinate amount of time) to eliminate bodily waste, even with therapy or the use of any appropriate devices or medications, 90% of the time or more, then that individual qualifies. It is our understanding an effect or result of kidney failure is the loss of the ability to perform a basic activity of daily living (elimination). Hemodialysis is the medical process which becomes necessary because of the inability to void all or almost all of the time. We do not interpret "hemodialysis" to a therapy, device or medication which permits elimination. Rather, it is because of the individual's inability to void bodily wastes that toxins build up in the system, thereby requiring the regular and timely process of hemodialysis to remove the toxins.

									962663
XXXXXXXXXX							Sandra Short

Attention: XXXXXXXXXX

November 7, 1996

Dear XXXXXXXXXX:

Re: Disability Tax Credit for Patients on Hemodialysis

This is in reply to your letter of July 12, 1996, which asks whether a patient on regular, three times a week, hemodialysis is entitled to claim the disability tax credit.

The publication entitled "How to Assess Disabilities for Income Tax Purposes" states that a patient who has renal failure and needs 12 or more hours a week of hemodialysis would normally qualify for the credit. It also states that each case is assessed on its own merits. You have requested assistance to help you differentiate between patients, all of whom depend on long term dialysis for survival. You have also noted that question or box 7 of form T2201 "Disability Tax Credit Certificate" appears to apply to people with incontinence problems, which is not the case for those suffering renal failure.

Our Comments

It is our opinion that an individual whose kidneys have failed and who, as a result, is required to undergo regular, 3 times a week, hemodialysis, qualifies for the disability tax credit. Our reasoning follows.

For purposes of the disability tax credit, the effects of an impairment - such as kidney failure - must be such that the individual's ability to perform a "basic activity of daily living" is "markedly restricted." One defined basic activity of daily living is "elimination," that is, the ability to eliminate bodily waste. Pursuant to subsection 118.4(1) of the Act, an individual's ability to perform a basic activity of daily living is considered to be "markedly restricted" only if all or substantially all of the time, even with therapy and the use of appropriate devices and medication, the individual is blind or is unable (or requires an inordinate amount of time) to perform a basic activity of daily living. An individual would be considered to have met the "all or substantially all" requirement if 90% of the time (or more) the individual is unable (or requires an inordinate amount of time) to perform a basic activity of daily living.

Thus, if an individual is unable (or requires an inordinate amount of time) to eliminate bodily waste, even with therapy or the use of any appropriate devices or medications, 90% of the time or more, then that individual is entitled to the disability tax credit assuming all other criteria have been met (impairment is severe and prolonged, disability tax credit certificate filed, and so on).

It is our understanding that an effect or result of kidney failure is the loss of the ability to perform a basic activity of daily living (elimination). Hemodialysis is the medical process which becomes necessary because of the individual's inability to void bodily waste all or almost all of the time. We have not interpreted "hemodialysis" to be a therapy, device or medication which permits elimination. Rather, we believe that it is because of the individual's inability to void bodily wastes that toxins build up in the system, thereby requiring the regular and timely process of hemodialysis to remove the toxins.

We agree that Box 7 of form T2201, Disability tax credit certificate, is worded primarily to address patients whose elimination difficulties relate to an inability to control and manage bladder or bowel functions. You should respond to the question as posed with a "no" and attach a letter of explanation.

We trust our comments will be of assistance to you.

Yours truly,

John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch