25 September 2003 External T.I. 2003-0030965 - ATTENDANT CARE

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 CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues:

1) Can an individual living in a retirement home make a claim for attendant care expenses in respect of amounts paid to the retirement home?

2) What type of expenses may be considered attendant care service when a basic monthly rent is paid to a retirement home?

Position: 1) Yes 2) General comments

Reasons:

1) Provided the resident meets the requirements of subsection 118.3(1) of the Act (disability) and provided the resident can establish that an amount, in addition to the amount paid as rent, is paid as remuneration for attendant care.

2) Depending on the situation, such tasks could include meal preparation, housekeeping, laundry services, transportation and personal services such as banking and shopping. However, fees paid for identifiable personal expenses, such as hairdresser fees, would not qualify.

XXXXXXXXXX 2003-003096
Shaun Harkin, CMA
September 25, 2003

Dear XXXXXXXXXX:

Re: Technical Interpretation Request: Disability Tax Credit

This is in reply to your letter of May 23, 2003 wherein you requested our views on attendant care expenses. In particular you ask:

1) Would an individual living in a retirement home be eligible to make a claim for attendant care expenses in respect of amounts paid to the retirement home?

2) What guidelines can the Canada Customs and Revenue Agency ("CCRA") offer to retirement homes in separating costs for attendant care services and what type of expenses may be considered attendant care service when a basic monthly rent is paid to a retirement home?

3) Whether CCRA's view on the eligibility of fees paid to nursing homes for personal services, such as hairstyling, has changed?

Our Comments

1) We are of the view that a resident of a retirement home may make a claim under paragraph 118.2(2)(b.1) of the Income Tax Act (the "Act") in respect of attendant care, provided the resident meets the requirements of subsection 118.3(1) of the Act (disability) and provided the resident can establish that an amount, in addition to the amount paid as rent, is paid as remuneration for attendant care. To qualify under paragraph 118.2(2)(b.1), a claim must be accompanied by proof of payment, generally by means of a receipt, and must pertain to actual remuneration paid for attendant care.

2) The home, as the service provider, must determine the total amount paid for attendant care and allocate such amounts to the residents on a reasonable basis. In our view, the amounts that may be so allocated would generally be limited to salaries and wages paid to employees engaged in providing attendant care services. Attendant care is care provided by a person who performs those personal tasks that the individual with a disability is unable to do. Depending on the situation, such tasks could include meal preparation, housekeeping for the resident's personal living space, laundry services for the resident's personal items, transportation and personal services such as banking and shopping. However, fees paid for identifiable personal expenses, such as hairdresser fees, would not qualify as a medical expense.

3) It remains our view that all regular fees paid to a nursing home, including food, accommodation, nursing care, administration, maintenance and social programming, qualify as medical expenses which are eligible for the medical expense tax credit. Additional personal expenses, which are separately identifiable, such as hairdresser fees, are not allowable expenses.

The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R5, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Customs and Revenue Agency. Our practice is to make this disclaimer in all instances in which we provide an opinion.

We trust the above comments are of assistance.

Yours truly,

Daryl Boychuk, LL.B
for Director
Business and Partnerships Division
Income Tax Rulings Directorate