24 June 1998 External T.I. 9815035 - SIGN LANGUAGE INTERPRETIVE SERVICES

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 sign language interpretative services, sign language training for parents and travel for parents qualifies as a medical expense

Position: interpretative services - yes, training - yes effective for 98
travel - to visit child at school for deaf - no, -to obtain medical services, including the training, yes to the extent provided by (g) & (h)

Reasons: C-28 passed june 18,1998 includes 118.2(2)(l.4), 98 budget proposes to allow training for 98 & subs, travel - allowed to the extent permited by 118.2(2)(g) and (h)

XXXXXXXXXX 981503
A. Humenuk

Attention: XXXXXXXXXX

June 24, 1998

Dear XXXXXXXXXX:

Re: Sign Language Interpretation Services

This is in reply to your letter of May 25, 1998, in which you ask about the status of the 1997 Federal Budget proposal, to treat the cost of sign language interpretation services as a medical expense for the purpose of the medical expense tax credit.

In your letter, you note that private health care insurance plans often limit coverage to expenses which qualify as medical expenses for income tax purposes. You ask whether the above-noted budget proposal has passed and if not, whether an individual can claim the cost of sign language interpretive services as a medical expense on the 1997 income tax return which was due April 30, 1998. You also ask for clarification on the extent to which the costs of sign language training for a deaf child’s parents and the cost of travel by the parents to visit the child when the child is in a regional school for the deaf outside of his or her community, qualify as medical expenses for purposes of the medical expense tax credit.

With respect to private health care insurance plans, there is no legal requirement for such a plan to limit coverage to expenses described in paragraph 118.2(2) of the Income Tax Act (the "Act"). A plan which limits its coverage to such expenses, will usually qualify as a private health services plan as defined in subsection 248(1) of the Act. On the other hand, a plan will not be disqualified as a private health services plan solely because it does not cover each and every medical expense described in subsection 118.2(2) of the Act. If a plan qualifies as a private health services plan, the payment of premiums by an employer on behalf of an employee are not included in the employee’s income and if an individual pays his or her own premiums, the premiums so paid will qualify as a medical expense for the purpose of the medical expense tax credit.

Bill C-28, which includes the income tax proposals made in the 1997 Federal Budget, received Royal Assent on June 18, 1998. Effective for 1997 and subsequent taxation years, the cost of sign language interpretation services paid to a person engaged in the business of providing such services, qualifies as a medical expense under paragraph 118.2(2)(l.4) of the Act when paid on behalf of an individual who has a speech or hearing impairment. Please note that eligible costs are not limited to sign language interpretation services provided in the course of obtaining other medical services. Paragraphs 11-17 of the enclosed Interpretation Bulletin IT- 519R2, Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, explain how the medical expense tax credit is calculated.

With respect to sign language training, rehabilitative therapy for an individual who has a speech or hearing loss has qualified as a medical expense since 1992. However, as explained in paragraph 74 of IT-519R2, the February 24, 1998 Federal Budget proposes to further expand the definition of medical expenses for 1998 and subsequent taxation years, to include the cost of training of an individual to care for a person related to that individual, who has a mental or physical infirmity and who is a member of that individual’s household or is dependant on that individual for support. This would include sign language training for the parents of a child provided that the child either lives with the parent taking the training or is dependant on that parent for support. As explained in the definition of child in Appendix A to Interpretation Bulletin IT-513R, Personal Tax Credits, (a copy of which is enclosed), the child of an individual’s spouse is considered to be the individual’s child for purposes of the Act.

Paragraphs 32-35 of IT-519R2 describe the circumstances under which the cost of travel for a patient and, where required, an individual to accompany that patient, qualifies as an eligible medical expense. The cost of travel to visit a patient while the patient is residing outside of his or her community at a school, institution or other place described in paragraph 118.2(2)(e) of the Act, does not qualify as a medical expense. However, the cost of the parent’s travel to obtain sign language training will qualify as a medical expense provided that the training qualifies as a medical expense, and the criteria in paragraphs 32 to 35 are met. You will note that the automobile costs related to travel only qualify as a medical expense when the patient (including a parent who is travelling to obtain training for the care of a patient) must travel more than 80 kilometres to obtain the medical service or public transportation is not readily available.

We trust that these comments will be of assistance.

Yours truly,

J.F. Oulton, CA
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
Enclosure