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.
DRAFT
Revenue Canada Round Table
Institute of Chartered Accountants of Nova Scotia
February, 1994
Question No. 4
DISABILITY TAX CREDIT
Under subsection 118.2(2)(e), a person may claim, as a medical expense, an amount paid for the care at an institution provided that the patient is a qualified person and requires the equipment, facilities or personnel specially provided by that institution.
Assume that implicit in the cost of residing at such an institution is rent, personnel and other related costs. The Department's position, as outlined in IT-519, paragraph 5, is that the disability tax credit will not be allowed in the case where a taxpayer makes a claim for an attendant or nursing home care under the provisions of medical expenses. In this case, is it the Department's position that because implicit in the cost of residing at such an institution are personnel costs, the taxpayer would be denied the disability credit as these personnel costs would be characterized as "attendant" costs?
Secondly, the Department has indicated (Technical Interpretations, Business and General Division - November 14, 1991) that a facility could be characterized as a nursing home even if it was not licensed as such. This is the case where "it has qualified medical personnel in attendance of a calibre and in sufficient numbers to provide care to resident patients on a 24-hour basis". Is it the Department's opinion that an institution described above which provides such personnel would qualify as a "nursing home" and therefore a taxpayer claiming such amounts as medical expenses would be disallowed the disability credit on the grounds that the amounts have been paid for nursing home care?
Department's Position
The reference in paragraph 5 of Interpretation Bulletin IT-519 to "attendant care" is based on the restriction in paragraph 118.3(1)(c) of the Act which denies a disability tax credit where the remuneration paid for an attendant is used in computing the amount of the medical expense tax credit claimed for that year. In our view an amount paid to a school, institution or other place for residential care would not be considered "remuneration" and thus would not be "remuneration for an attendant" even though the fees paid may be used by that school, institution or other place to pay the remuneration of its staff. Consequently a claim for a disability tax credit will not be denied solely on account of attendant care costs which are included in the fees paid to a school, institution or other place (other than a nursing home) for residential care or care and training which were claimed by the taxpayer as a medical expense under paragraph 118.2(2)(e) of the Act for that year.
With respect to the restriction in paragraph 118.3(1)(c) of the Act which denies a disability tax credit where the cost of care in a nursing home has been claimed as a medical expense (otherwise than by reason of paragraph 118.2(2)(b.1) of the Act), it is our view that a claim for a medical tax credit for care in a nursing home will preclude a claim for the disability tax credit in the same year regardless of whether the claim is made under paragraph 118.2(2)(d) or (e) of the Act. However, it is a question of fact as to whether or not any particular place is a nursing home which can only be determined with reference to all relevant factors. The commentary in the November 14, 1991 technical interpretation was not intended to be a definition of a nursing home but rather was intended to point out the difficulties in establishing a place to be a nursing home where the place had insufficient staff to operate as such. As stated in paragraph 24 of Interpretation Bulletin IT-519, the use of the word "school" or "nursery" will not affect the determination of whether the place qualifies as a nursing home.
Author:A. Humenuk
File:940149
Date:February 11, 1994
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