14 July 1997 External T.I. 9705895 - MEDICAL EX FOR CARE IN AN ASSISTED LIVING FACILITY

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 an assisted living facility is a place described in 118.2(2)(e) such that the fees paid for accommodation therein qualify as a medical expense

Position:

generally such fees would not qualify, although it depends on the nature of the specific handicap and whether specially provided equip, facilities or personnel are provided

Reasons:

because this provision is addressing a type of place which may not be a medical facility, the eligibility of a particular place cannot be established independent of the individual who has a handicap which requires placement in that particular place: while the place need not be a hospital or a nursing home, the place must offer specialized equipment, facilities or specially-trained personnel tailored to a specific handicap.

A. Humenuk
XXXXXXXXXX				970589

Attention: XXXXXXXXXX

July 14, 1997

Dear Sirs:

Re: Medical Expense - Assisted Living Facility

We are replying to your letter of February 28, 1997, in which you inquire whether the fees paid for accommodation in the XXXXXXXXXX, an assisted living facility, qualify as a medical expense for tax purposes.

In our telephone conversation of May 30, 1997 (XXXXXXXXXX\Humenuk), you stated that XXXXXXXXXX is not a nursing home. However, the definition of a medical expense in subsection 118.2(2) of the Income Tax Act (the "Act") includes an amount paid for the care or care and training of an individual at a school, institution or other place which is specially equipped to care for individuals with a specific handicap provided that the individual has been certified by an appropriately qualified person to require the specialized equipment, facilities or personnel provided at that place because of the handicap suffered by that individual. In light of the comments in paragraph 33 of Interpretation Bulletin IT-519R, you have asked whether the fees paid to XXXXXXXXXX would qualify as a medical expense by reason of paragraph 118.2(2)(e) of the Act in respect of the residents who have been certified by a medical practitioner to have a medical or physical impairment.

The particular circumstances outlined in your letter relate to a factual situation involving specific taxpayers. As explained in Information Circular 70-6R3, "Advance Income Tax Rulings", it is not our practice to comment on proposed transactions involving specific taxpayers. In addition, it should be noted that we cannot provide you with a definitive response without a review of all the relevant facts of a particular individual's needs. Nevertheless, we offer the following general comments which may be of assistance to you.

When a school, institution or other place provides care or care and training specific to a particular handicap by means of specially provided equipment, facilities or personnel, the fees paid for such care will qualify under paragraph 118.2(2)(e) of the Act, provided that the person receiving the care has been certified to need the specially provided equipment, facilities or personnel of that place. The certification by the person qualified to assess the individual's needs and medical condition should contain sufficient information as to the nature of the handicap and why the individual needs the specialized equipment, facilities or personnel provided by the particular school, institution or other place.

Although the requirements of paragraph 118.2(2)(e) of the Act may appear less restrictive than those of paragraphs 118.2(2)(b) or (d) of the Act, in that the care described in paragraph 118.2(2)(e) need not be provided in a nursing home or be provided on a full-time basis, paragraph 118.2(2)(e) contains other requirements that do not apply to paragraphs 118.2(2)(b) or (d) of the Act. For example, although the place referred to in subparagraph 118.2(2)(e) of the Act need not be a nursing home, it must have equipment, facilities or personnel specially tailored for the care of individuals suffering from the specific handicap that the individual who has been certified to be in need of such specialized equipment, facilities or personnel suffers from.

Without knowing the specific nature of a handicap, it is difficult if not impossible to determine whether the facilities and personnel of a place are specially provided for the care of a person suffering from that particular handicap. With respect to a seniors' residence or a retirement home, it should be emphasized that old age is not a handicap by itself, but that an individual may suffer from a handicap because of a condition which may be associated with old age. Although an individual who is resident in a seniors' residence or in an assisted living facility may require long term care or assistance in carrying out the daily activities of living, fees paid for such care will not qualify as a medical expense under paragraph 118.2(2)(e) of the Act, unless the care provided at that place is specially tailored to the individual's handicap and is provided by means of specialized equipment, facilities or personnel.

In addition, although an appropriately qualified individual may certify that a particular person is in need of supervision, the amount paid for care in a place which provides supervision will not ordinarily qualify as a medical expense under paragraph 118.2(2)(e) of the Act, since the training required to supervise residents of an institution is not ordinarily specific to a particular handicap. However, a specific handicap such as that caused by Alzheimer's disease may require specially trained personnel for supervision. The fees paid for the care of an individual who has been certified by an appropriately qualified person to be in need of facilities designed to care for individuals suffering from Alzheimer's disease would qualify as a medical expense. However, the fees paid for the care of an individual who needs supervised care, but not of a specialized kind, will only qualify as a medical expense if the place where such care is provided is a nursing home. In this regard, we note that a nursing home does not necessarily need to be licensed as such, provided that qualified medical personnel are in attendance of a calibre and in sufficient numbers to provide full time nursing care to the patients on a 24-hour basis. Staff that are on call while away from the facility would not be considered to be in attendance for this purpose.

Similarly, a facility which is wheelchair accessible or which has safety rails in the hallways and washrooms would not qualify as a place described in paragraph 118.2(2)(e) of the Act solely by reason of such accessibility. Although an individual with a severe and prolonged mobility impairment will typically require accommodation in a place which is fully wheelchair accessible, current building codes suggest that such accessibility does not constitute a specialized facility. In addition, the provision of equipment common to most group living, such as smoke detectors, sprinklers, emergency call systems, and social and recreational programs, is not sufficient to meet the requirements of paragraph 118.2(2)(e) of the Act.

We have reviewed the list attached to your letter describing the equipment and services provided by XXXXXXXXXX, and given the comments above, it is unlikely that the equipment would be considered to be specific to a particular handicap.

We trust our comments will be of assistance.

Yours truly,

C. Chouinard
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch