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.
Principal Issues:
Support payments for aged parents
Position:
No relief in the law
Reasons:
There is no provision in the ITA for these types of payments
MINISTER/DEPUTY MINISTER'S OFFICE 97-05607M
ADM'S OFFICE
RETURN TO 15TH FLOOR, ALBION TOWER
November 17, 1997
XXXXXXXXXX
Dear XXXXXXXXXX:
I am writing in response to your letter of August 29, 1997, to the Honourable Herb Dhaliwal, P.C., M.P., concerning your request for a review of the sections of the Income Tax Act that deal with the deductibility of support payments.
I have noted your observation that the Act provides a deduction for support payments between spouses. While that is true, the deduction has become more restricted with the introduction of the new regime for child support payments, which became law earlier this year. In general terms, the new system provides that child support payments received under orders or agreements, will not be included in the recipient's income nor be deductible from the income of the payer.
You have asked what the Department's position is in the situation where adult children are required by a court order to make significant monthly payments to support their parents. Since there is no provision in the Act that provides a deduction for parental support in such circumstances, the payers of this type of support would not be allowed a deduction in calculating their income when filing their annual income tax returns.
Your view is that it was an oversight on the part of the policy makers, that there is no deduction for parental support in the income tax legislation. Matters of tax policy are, of course, the responsibility of the Minister of Finance, the Honourable Paul Martin, P.C., M.P. I trust that his response to the letter of July, 22, 1997, from XXXXXXXXXX, to Mr. Martin, will comment on the tax policy aspect of whether or not an amendment to the income tax legislation should be recommended to provide a deduction for court ordered parental support payments.
I hope that my comments have addressed your concerns.
Yours sincerely,
Denis Lefebvre Assistant Deputy Minister Policy and Legislation Branch
John Oulton
957-2141
October 6, 1997