Section 118.3

Subsection 118.3(1) - Credit for mental or physical impairment

Cases

Canada (Attorney General) v. Buchanan, 2002 DTC 7397, 2002 FCA 231

In the situation (such as the case at Bar) where a psychiatrist had made a legal error in giving a negative certificate, the question to be determined was whether, with the Judge applying the correct legal test, it was apparent that the physician would have issued a positive certificate, or whether there was still room for medical judgment to be exercised as to whether the certificate should be positive or negative. The former situation applied here, with the result that it was open to the Tax Court Judge to conclude (as she did) that the medical certificate was incorrectly completed and that, applying the correct legal test, the negative certificate should be treated as a positive one.

Partanen v. Canada, 99 DTC 5436 (FCA)

The finding of the Tax Court that a certificate from a medical doctor was a prerequisite for obtaining the disability credit, and that the requirement for a medical certificate did not violate taxpayer's equality rights under section 15 of the Charter, was affirmed.

See Also

Pekofsky v. The Queen, 2014 DTC 1151 [at 3487], 2014 TCC 183 (Informal Procedure)

impaired judgment and short-term memory were sufficient

Lamarre J found that the Minister erred in finding that the taxpayer's daughter, although learning-disabled, was not markedly restricted in her ability to perform the activities of daily living. The psychologists' reports and other evidence all indicated that the daughter (para. 20):

...has problems not only with her learning activities at school but also with her daily activities, on account of her short-term memory impairment and her dysfunction with regard to the ability to use her judgment. The mother explained, amongst other things, that she constantly needs to supervise her daughter and that everything takes more time for her daughter to accomplish than is the case for other children of her age.

The taxpayer's disability tax credits were therefore allowed.

Walkowiak v. The Queen, 2013 DTC 1036 [at 170], 2012 TCC 453 (Informal Procedure)

ADHD condition did qualify

Boyle J. denied the taxpayer's disability tax credit under s. 118.3(1) for ADHD and a DSM-IV Disability not otherwise specified, based on his finding that the taxpayer's difficulties were not severe enough to markedly restrict her ability to perform basic activities of daily living. She had difficulties in remembering tasks, expressing herself, finding solutions to problems, making appropriate judgments and organizing and executing plans. However, Boyle J. noted mitigating factors, including that:

  • she had developed effective coping strategies, such as spending greater time on her studies and preparing sticky notes indicating things that needed doing;
  • she was demonstrably up to raising her children, who had similar disorders, and she often took care of them independently; and
  • she took prescribed medication that minimized the help she needed with everyday life situations.

McKenna v. The Queen, 2005 DTC 1410, 2005 TCC 599 (Informal Procedure)

The taxpayer unsuccessfully made a submission that it constituted discrimination contrary to s. 15(1) of the Charter for disability pension benefits that she received under the Canada Pension Plan Act to be included in her income without a credit being accorded to her under s. 118.3 of the Act.

Administrative Policy

S1-F1-C2 - Disability Tax Credit

When a certification is being completed after the death of the eligible person with a disability, the disability tax credit will be available provided the certification is based on a prognosis, made by an appropriate medical practitioner before the person died, which concluded that the person's severe and prolonged impairment was reasonably expected to last for a continuous period of at least 12 months.

2 November 89 T.I. (April 90 Access Letter, ¶1180)

A taxpayer may claim both a credit under s. 118.3(1) and a deduction for full-time care under 118.2(2)(b) or (d) provided that they are being claimed for different mental or physical impairments.

Paragraph 118.3(1)(a.1)

Cases

Mullings v. The Queen, 2017 TCC 133 (Informal Procedure)

time spent administering medical formula food was therapy

The taxpayer’s ability to claim the disability tax credit in respect of her young child, who suffered from an inability to digest a common amino acid (“Phe”), turned on whether she was spending at least 14 hours per week on therapy, which was defined in s. 118.3(1.1)(d) to exclude “time spent on dietary…restrictions or regimes.”

Keeping such a child’s bodily levels of Phe within a narrow range (failing which there will be severe brain damage) requires that “medical formula [food] is given in very precise doses four times a day and administering it is no different from administering any other prescription medication.” Since “measuring and controlling Phe intake is properly characterized as administration of the therapy and not as control of X’s diet,” the time so spent counted towards the 14 hours. The taxpayer was entitled to the credit.

Words and Phrases
therapy
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.3 - Subsection 118.3(1.1) - Paragraph 118.3(1.1)(d) time spent administering special “medical formula” foods to a child counted as therapy administration and not as dietary control 296

See Also

Hughes v. The Queen, 2018 TCC 42 (Informal Procedure)

care of a child with severe and stringent dietary requirements qualified for the disability tax credit

The taxpayer applied for the disability tax credit (“DTC”) in respect of her daughter, Gwynneth, in June 2015 using CRA’s form T2201, which included the required certification by Gwynneth’s doctor. The taxpayer’s daughter was born with phenylketonuria (“PKU”). PKU is a lifelong condition for which there remains no cure, only lifelong treatment. If left untreated, a child with PKU can be expected to suffer permanent severe brain damage. CRA issued a notice of determination stating Gwynneth was not eligible for the DTC on the basis that her impairment related to a dietary restriction and her treatment activities consisted of following a dietary regime.

In finding that there was “life‑sustaining therapy” supporting a vital function, Boyle J found (at para 60):

…[A]bsent this therapy Gwynneth would have potentially devastating and irreversible adverse consequences to her proper mental development and functioning. Clearly the brain and its mental functions are vital and its normal functioning is sustained by this therapy.

Boyle J further found that the 14‑hour average requirement in s. 118.3(1)(a.1)(ii) was met, stating (at paras 52 and 54):

The corrected chart … would be 798.5 minutes or 13.3 hours.

…[W]here the average of what is described in the DTC legislation with respect to life‑sustaining therapy, where it would be entirely unreasonable to expect persons to keep time logs of their actual activities on a daily basis for accurate and precise measurement, I would be inclined to think that the concept of significant digits for measuring total average hours is solely whole numbers. On that basis, even without a 5% to 10% increase I have found warranted in this case, I would be inclined to think that anything 13.5 hours or greater estimated with the inherent limitations that the statute clearly contemplates, should satisfy the 14‑hour requirement.

Boyle J further found (at paras 57 and 61):

I conclude that the proper meaning of the word “therapy” (soins thérapeutiques) in the DTC provisions … simply means the care or treatment of a physical or mental condition. …

None of Gwynneth’s treatment related to what can fairly be described as simply a dietary restriction… . [The treatment] … is much more like administering a medication than it is like managing a diet. I agree that this should extend to the time spent determining the amount of Phe to be consumed, determining the amount of Phe actually consumed, and logging the Phe intake.

Words and Phrases
therapy

Administrative Policy

8 March 2018 Internal T.I. 2017-0724351I7 - Disability tax credit - lab tests as therapy

lab testing not necessarily included in s. 118.3(1.1)(a.1)

As a result of the Adverse Decision Committee meeting on September 21, 2017 on Mullings, the Directorate reviewed whether the time spent for lab tests would be included in the time spent administering therapy as described in s. 118.3(1)(a.1). After noting that “the weekly blood tests in this case would likely be considered an activity that would be included in the time spent administering therapy” since the “weekly blood tests were required to ensure that the proper Phe level was being maintained,” the Directorate stated:

It is … a question of fact whether the determination of a specific activity, for example a weekly blood test, can be included in the time spent administering therapy as described in paragraph 118.1(1)(a.1) of the Act. … What would be considered essential to one person’s impairment may not be considered essential to another. As stated in paragraph 118.3(1.1)(a), only time spent on activities that require the individual to take time away from normal everyday activities in order to receive the therapy would be included.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.3 - Subsection 118.3(1) - Paragraph 118.3(1.1)(d) appointment time for actual therapy not excluded 121

Paragraph 118.3(1)(b)

See Also

Connolly v. The Queen, 2019 TCC 160 (Informal Procedure)

Notice of Confirmation likely should not address DTC claims for subsequent years

The Notice of Confirmation confirmed that the appellant was not eligible for the DTC for the period including the 2010 to 2014 taxation years. The taxpayer’s physician filled out a disability tax credit form in September 2015 indicating that there were two basic activities of daily living where the taxpayer was significantly restricted and that cumulatively the effect since 2014 of these restrictions was the same as being markedly restricted in one basic activity of daily living.

Jorré DJ first noted that the Minister in her Notice of Confirmation had indicated that the taxpayer was eligible for the DTC for her 2015 and later years even though the Notice of Confirmation was dated before her filing-due date for her 2015 year, and commented obiter respecting the 2015 and later years that were not under appeal (at paras 3 and 5):

The Notice of Confirmation accepted that the Appellant was eligible for the credit in respect of the 2015 taxation year and certainly later years. …I have some difficulty with the notion of a Determination being made pursuant to the statutory provisions in respect of time periods after the date of the Determination or Confirmation. …

… [I]t would be surprising if on a proper interpretation the relevant statutory provisions gave the Minister the power to make a determination with respect to future eligibility. However, I can see nothing that would prevent the Minister from determining that the person was eligible in certain past years and informing the person that the Minister’s present intention was to assume that the person would continue to be eligible for certain future years. …

Jorré DJ found that the taxpayer became eligible for the DTC in 2014, stating (at paras 21, 23, 25, 27):

… I am satisfied that over time her conditions and her restrictions were getting worse. …

… [T]he Appellant was doing physical labour in factories during much of the 2010 to 2014. …[T[hese were full-time jobs.

…[T]he statutory tests … under subsection 118.4(1) … requires that the restriction be assessed when the individual is using available therapy and appropriate devices or medication. … [I]f an individual who would otherwise be markedly restricted is not markedly restricted through the use of medication, for example, then the individual would not meet the marked restriction test.

However, considering that her physician was satisfied that there was the equivalent to a marked restriction in performing a basic activity in 2014 …, I am satisfied that the Appellant became eligible starting in 2014.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 165 - Subsection 165(3) there may be no authority for a Notice of Confirmation to pass on subsequent taxation year 142

Paragraph 118.3(1.1)(d)

Administrative Policy

8 March 2018 Internal T.I. 2017-0724351I7 - Disability tax credit - lab tests as therapy

appointment time for actual therapy not excluded

After effectively accepting Mullings by stating that “the weekly blood tests in this case would likely be considered an activity that would be included in the time spent administering therapy” since the “weekly blood tests were required to ensure that the proper Phe level was being maintained,” the Directorate went on to state::

We note that although the blood tests could be considered time spent administering therapy, any travel time to and from a blood test would be specifically excluded as per paragraph 118.3(1.1)(d) of the Act.

Although paragraph 118.3(1.1)(d) of the Act specifically excludes time spent on activities related to medical appointments, it is our view that an appointment where therapy is actually received would not fall under this exclusion.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.3 - Subsection 118.3(1) - Paragraph 118.3(1)(a.1) lab testing not necessarily included in s. 118.3(1.1)(a.1) 167

Subsection 118.3(1.1)

Paragraph 118.3(1.1)(d)

See Also

Mullings v. The Queen, 2017 TCC 133 (Informal Procedure)

time spent administering special “medical formula” foods to a child counted as therapy administration and not as dietary control

The taxpayer’s young child (“X”) had classical phenylketonuria, a genetic disorder that eliminates or severely restricts the body’s ability to metabolize phenylalanine (“Phe”). Unrelenting precise treatment to maintain bodily Phe levels within a very narrow range (including proper balancing of “medical formula” food, containing no Phe, with more regular, but low-Phe, foods) is required to avoid causing permanent severe brain damage. The taxpayer applied for the disability tax credit in respect of X.

After stating (at para 37) that “ medical appointments in paragraph 118.3(1.1)(d)… would not include an appointment where there is actual treatment or testing that is part of the treatment,” Jorré J went on to find that the taxpayer spent more than 14 hours per week on qualifying therapy, as required by s. 118.3(1)(a.1), stating (at paras 41, 42, 44 and 48):

… The medical formula is given in very precise doses four times a day and administering it is no different from administering any other prescription medication.

… [T]he time spent relating to the blood tests and to the administration of the formula can be counted as part of administering the therapy. …

… While Phe is an element of nutrition, the activities necessary to assure precise delivery every day of 300 milligrams of Phe to the child, and no more than 300 milligrams, are much more akin to the administration of a medication than to the management of a diet.

… [M]easuring and controlling Phe intake is properly characterized as administration of the therapy and not as control of X’s diet with the consequence that the correct way to apply these rules [in subsection 118.3(1.1)] is to consider that the time spent determining the amount of Phe to be consumed and actually consumed, including the time spent logging Phe intake, should be considered as part of the 14‑hour a week average.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.3 - Subsection 118.3(1) - Paragraph 118.3(1)(a.1) time spent administering medical formula food was therapy 141

Subsection 118.3(2) - Dependant having impairment

Administrative Policy

S1-F1-C2 - Disability Tax Credit

[A] person is generally considered to be dependent on someone if the individual has actually supplied necessary maintenance, or the basic necessities of life (food, shelter and clothing) on a regular and consistent basis. Where the eligible person with a disability was in receipt of social assistance or any other type of financial or non-financial support, the supporting individual must be able to show that the other assistance was insufficient to fully meet the basic needs of the eligible person with a disability and that the person had to rely on the additional support provided by the supporting individual.