15 May 1998 Internal T.I. 9725807 - MEANING OF DEPENDENT ON T/P FOR SUPPORT

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 grandchildren living with mother who is on social assistance are dependent upon grandparents for support for the purpose of 118(6) and 118.2

Position: question of fact to be determined by tso

Reasons: the issue is not simply whether the grandparents contribute to the support of the grandchildren but whether the grandchildren are in a position to rely upon such support and whether other sources of support such as the social assistance are insufficient to meet their needs

		May 15, 1998
	Halifax Tax Services Office	HEADQUARTERS
	Peggie Rankin	A. Humenuk	

972580

XXXXXXXXXX - Medical Expenses

This is in reply to the memorandum dated September 22, 1997 from Lucie Theriault- Harvey of your office in which she asked us to reply to the above-noted taxpayer as to whether the taxpayer was able to claim a medical expense in respect of her granddaughters. We understand that Ms. Theriault-Harvey is no longer working in Client Assistance and that you will be able to arrange for someone to respond to XXXXXXXXXX query.

The issue raised by XXXXXXXXXX is whether she, as the grandmother of children requiring orthodontic services, may claim the fees paid for such services as a medical expense for the purpose of the medical expense tax credit. XXXXXXXXXX further explains that her daughter left her husband in 1995 and is currently receiving social assistance from the municipality. While, the children and their mother live in a separate establishment from the grandmother, the grandmother has contributed to their support by paying for groceries, heat and certain other expenses that the daughter is unable to pay for on her own.

As explained in paragraph 14 of Interpretation Bulletin IT- 519R2, Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, the medical expenses paid in respect of the grandchildren will qualify for the medical expense tax credit of the grandmother if it can be established that the grandchildren were dependent upon the grandmother for support in the year in which the expenses were incurred. The issue of what constitutes support or more specifically, what criteria must exist in order to make a finding that a particular individual (the "patient") is dependent upon another for support is a question of fact to be determined in each case. Consideration should be given to whether or not the actions or contributions of a particular individual vis-A-vis the patient are of such a nature and degree that they could be said to constitute support of the patient and that a relationship of factual dependency can be said to exist, i.e., reliance on that support. The type of support upon which the patient may be dependent must be found to be regular and consistent as opposed to a single incident or sporadic incidents of assistance.

While the patient need not be exclusively reliant upon one individual or entity in order for the patient to be considered a dependant of the individual within the meaning of subsection 118(6) of the Income Tax Act, the availability and quantum of other forms of support will be relevant in determining whether the patient in fact relies upon the support given by that individual. Accordingly, when a person is in receipt of social assistance or any other type of support, one must assess whether such other assistance is sufficient to fully meet that person's personal needs and to what degree the person must also rely on the support provided by the individual making a claim. Having said that, we recognize that the patient may be dependent upon more than one individual for support and that a patient who is a child need not be in the custody of the individual providing support in order for the child to be dependent upon that individual for support.

In the case at hand, what needs to be determined is whether the mother and children must rely on the contributions of support provided by the grandparents of the children. Is the support provided by the grandparents recognized in determining the quantum of social assistance available to the mother? Have the grandparents accepted the responsibility of assisting with the support of the mother and her children? To what degree are the payments made by the grandparents considered gifts as opposed to support payments which the mother and children can expect to receive regularly? We enclose XXXXXXXXXX original letter and enclosures and trust that our comments will assist you in making your determination of the facts.

For your information a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Legislation Access Database (LAD) on the Department's mainframe computer. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, they can be provided with the LAD version or they may request a copy severed using the Privacy Act criteria which does not remove client identity. Requests for this latter version should be made by you to Jackie Page at 613 957-0682. The severed copy will be sent to you for delivery to the client.

P. Spice
Section Chief
Business, Property and Employment Section III
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

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