Principal Issues: Is a payment received by a caregiver from the British Columbia HomeShare program included in income for purposes of the calculation of the Guaranteed Income Supplement?
Position: No.
Reasons: Payments made under the HomeShare program that meet the requirements of paragraph 81(1)(h) under the Act are exempt from tax. Income under the Act is used to determine a person's entitlement to the Guaranteed Income Supplement.
XXXXXXXXXX 2010-038915 P. Waugh
January 26, 2011
Dear XXXXXXXXXX :
Re: HomeShare program and Guaranteed Income Supplement
I am writing in response to your letter of July 28, 2010 concerning the impact a payment received by a caregiver under the British Columbia HomeShare program has on the Guaranteed Income Supplement. More specifically, you have enquired under what section of the Income Tax Act (the "Act') this issue can be found.
In the situation you described, a senior citizen receives a payment for providing home care to a disabled person under the British Columbia HomeShare program. The individual is also receiving an Old Age Security, Guaranteed Income Supplement ("GIS") and Canada Pension Plan payment.
Our Comments
Written confirmation of the tax implications inherent in particular transactions may only be provided by this Directorate where the transactions are proposed and are the subject matter of an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. This Information Circular and other Canada Revenue Agency ("CRA") publications can be accessed on the Internet at http://www.cra-arc.gc.ca. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. We are, however, prepared to provide the following general comments.
Paragraph 81(1)(h) of the Act exempts from income social assistance payments received by foster parents for the care of foster children that reside in their principal residence and by caregivers of developmentally handicapped adults that reside in the caregiver's principal residence. In order to qualify for the exemption, a payment must be received under a program provided for by an Act of Parliament or a law of a province; the caregiver and the cared-for individual cannot be related; the caregiver and the cared-for
individual cannot be spouses or common-law partners and the social assistance must ordinarily be made on the basis of a means, needs or income test.
Payments received by the caregivers under the HomeShare program normally qualify for the exemption under paragraph 81(1)(h) of the Act as long as all requirement of this paragraph are met (e.g. the caregiver and cared-for-individual are not related, spouses or common-law partners, etc.).
In accordance with section 12 of the Old Age Security Act ("OASA"), an individual's entitlement to the GIS is generally based on the individual's "income" for the preceding calendar year. Section 2 of the OASA defines "income" to be income computed in accordance with the Act.
As noted above, payments to caregivers that meet the requirements of paragraph 81(1)(h) of the Act are not included in income under the Act. Therefore, these payments that meet the requirements of paragraph 81(1)(h) would not be considered part of a caregiver's income for purposes of calculating the GIS under the OASA.
We trust these comments will be of assistance.
Yours truly,
Guy Goulet CA, M.Fisc.
A/Manager
for Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch