10 June 1997 Internal T.I. 9708237 - NURSING HOMES IN BC LICENSED AS PRIVATE HOSPITALS

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 the disability tax credit can be claimed in conjunction with a medical expense tax credit for care in a nursing home which is licensed as a private hospital

Position:

yes but not when a claim is made in respect of fees paid for care in a nursing home under 118.2(2)(b),(d) or (e)

Reasons:

to the extent that the fees are paid to a licensed private hospital for medical services for an individual, paragraph 118.3 will not operate to deny a disability tax credit for that individual for the same year, even though the hospital is also a nursing home.

		June 10, 1997

	Surrey Taxation Centre	Headquarters
	Enquiries and Adjustments	A. Humenuk
	Section 541-14	957-8953

	Attention: Carla Fraser
		970823

Interaction of Medical Expense Tax Credit and Disability Tax Credit

We are replying to your memorandum of March 19, 1997, in which you ask for clarification of the circumstances under which an individual who otherwise qualifies for a disability tax credit may claim both the credit under section 118.3 of the Income Tax Act (the "Act") and a medical expense tax credit for fees paid to a nursing home that is licensed as a private hospital.

Paragraph 118.3(1)(c) of the Act denies a disability tax credit in respect of an individual if an amount paid as remuneration for an attendant for that individual or in respect of that individual's care in a nursing home (otherwise than because of paragraph 118.2(2)(b.1)), has been included in calculating a medical expense tax credit under section 118.2 for the year, by that individual or by any other person. However, a claim for a disability tax credit in respect of an individual is not prohibited when an amount paid to a public or licensed private hospital for medical services provided to that individual has been included in the calculation of the individual's or any other person's medical expense tax credit for the year. It has come to your attention that many of the institutions of the type commonly referred to as nursing homes are licensed as private hospitals in the province of British Columbia. You inquire whether fees paid for care in such an institution are considered fees paid for care in a nursing home, with the result that the inclusion of such fees in a claim for a medical expense tax credit in respect of the individual receiving care is reason to deny a claim for a disability tax credit for that individual, notwithstanding that such fees may also qualify as a medical expense under paragraph 118.2(2)(a) of the Act.

In addition, you note that, since some institutions offer different levels of care, they may be licensed under both the Hospital Act and the Continuing Care Act of British Columbia. You submitted a list of residential care facilities with extended care units which are licensed under the Hospital Act and a list of residential care facilities which are administered under the authority of the Continuing Care Act. The latter list categorizes the facilities according to the level of care provided and whether the facility is designated as a hospital. For purposes of a claim under paragraph 118.2(2)(a) of the Act, you ask whether the legislation that provides the authority for the licensing of a particular facility is relevant, and in particular, whether fees paid to an institution designated as a hospital under the Continuing Care Act of British Columbia can be claimed in conjunction with the disability tax credit.

In our view, fees paid to a nursing home which has been licensed as a private hospital may be claimed as a medical expense under paragraph 118.2(2)(a) of the Act, provided the requirements of that provision are otherwise met. Expenses that are eligible under paragraph 118.2(2)(a) of the Act are limited to amounts paid for medical services. By limiting amounts which qualify under paragraph 118.2(2)(a) to amounts that are paid for medical services, other amounts paid to a hospital, such as amounts paid for parking or for meals in a cafeteria do not qualify as medical expenses. However, the amount charged for a patient's accommodation in a private or semi-private room in a public or licensed private hospital is recognized as being on account of medical services of the type offered by a hospital.

To the extent that fees charged by a nursing home that is a licensed private hospital can be considered on account of medical services, a claim for a disability tax credit in respect of an individual receiving such services will not be denied solely by reason of a claim made in the same year under paragraph 118.2(2)(a) of the Act in respect of the same individual. However, where an amount paid to a nursing home is claimed under paragraph 118.2(2)(b), (d) or (e) of the Act in respect of an individual, no amount may be claimed as a disability tax credit in respect of that individual for that year.

With respect to the province of British Columbia, it should be noted that the licensing provisions applicable to a private hospital are found in Part 2 of the Hospital Act of British Columbia. Subsection 6(1) of Part 2 of the Hospital Act states that no house shall be used as a private hospital unless it is licensed under that Act. Accordingly, an institution in British Columbia that is recognized as a private hospital for the purposes of the Continuing Care Act, but is not licensed as such under the Hospital Act, would not be considered to be a licensed private hospital for purposes of the Act. However, it seems reasonable to assume that the institutions categorized as private hospitals by the Continuing Care Division of the Ministry of Health for British Columbia (the "Ministry") in the lists submitted with your request are licensed as such. You may wish to verify the status of the institutions categorized as hospitals on the list of residential care facilities funded by the Ministry that are not found on the list of hospitals submitted with your request. If a facility or part thereof is licensed under the Hospital Act and the Continuing Care Act, fees paid for medical services in the part that is licensed as a licensed private hospital will qualify as a medical expense under paragraph 118.2(2)(a) of the Act.

In summary, it is our view that fees paid to an institution in British Columbia that is licensed under Part 2 of the Hospital Act of British Columbia will qualify as a medical expense under paragraph 118.2(2)(a) of the Act and that a medical expense tax credit which includes such fees can be claimed in conjunction with a disability tax credit. If a medical expense tax credit is claimed in respect of fees paid for the care of an individual in a nursing home which is not licensed as a private hospital, no amount can be claimed for that year under section 118.3 of the Act in respect of that individual.

C. Chouinard
A/Section Chief
Business, Property & Employment Section
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch