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.
Subject: SOCIAL ASSISTANCE PAYMENTS EMPLOYEE CONTRACTOR Section(s): 56(1)(u), 11(1)(f)(iii)]
January 27, 1992
Source Deductions Division Business and General
A. Bissonette Division
Director R.B Day
(613) 957-2136
913310
Respite Caregivers of the Province of Manitoba
We are writing in reply to your memorandum of November 28, 1991, wherein you requested our comments regarding the income tax status of "Respite Caregivers" in the circumstances described in the referral from the Winnipeg District Office.
XXX
- Respite care services may be provided, in the home of the recipient, in the home of the provider, at a camp or through a recreation/ leisure program or such other location that is appropriate to the needs and wishes of the mentally handicapped persons.
The D.0. is of the view that XXX (and other Respite Caregivers) are employees of family services and that their remuneration is not exempt from income tax.
Our Comments
In situations where a taxpayer receives social assistance payments as described in paragraph 56(1)(u), a corresponding deduction in computing taxable income is permitted under subparagraph 110(1)(f)(iii). This is the situation that the Minister of Finance was describing in his letter, and the situation that XXX believes applies to her.
From our review of the information submitted, it is our opinion that the description of the relationship between XXX and family services appears to evidence an employer/employee relationship, and any remuneration received from family services would be included in XXX income under subsection 5(1). No amounts would be deductible in computing this income except as provided by section 8.
If, on the other hand, family services were to acknowledge that XXX was an independent contractor and not an employee, the amounts received by her would be included in income under subsection 9(1) and reasonable expenses would be allowable as a deduction in computing that income.
Since XXX does not appear to be in receipt of social assistance payments nor does she appear to be an independent contractor, we are in agreement with the position taken by the District Office in this regard.
B.W. Dath
Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
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