13 July 1987 Income Tax Severed Letter 7-1764 - [Medical Expenses]

REVENU CANADA TAXATION MEMORANDUM

DATE: July 13, 1987

TO/A EXAMINATION DIVISION Office Examination Post Assessing and Matching Section

FROM-DE SMALL BUSINESS AND GENERAL
         DIVISION
        Jack Szeszycki
        957-2103
        Your file: HAV 6752-1

ATTENTION L.A. Loyko

RE Medical Expenses ----------------

This is in response to your memorandum of April 30, 1987 in which you raised three distinct issues with respect to medical expenses. We shall deal with them in the order presented.

1. The first issue raised concerned the meaning of the phrase "full-time attendant" as used in subparagraphs 110(1)(c)(iv) and (iv.1) of the Income Tax Act ("the Act"). In particular, you have outlined two sets of circumstances; one where the disabled individual only requires the services of an attendant for a couple of hours in the morning and evening, and the other where the attendant is only required during waking hours. In reviewing the available jurisprudence on the subject, our attention is drawn to the case of Wakelyn v.MNR 71 DTC 35 in which member J.0. Weldon placed an interpretation, to which you have referred in your memorandum, that the phrase "one full-time attendant" should reasonably be interpreted not to mean only one attendant looking after the "cared-for" person day-in, day-out etc. but rather that up to several attendants could be utilized over a specified period so long as the claim for tax purposes includes only one attendant for any given portion of that period. With respect to the issue at hand, the reasons for judgement further state "that there is nothing in the above provision (then subparagraph 27(1)(c)(iv)) which purports to suggest that every attendant brought in to assist in taking care of a physically helpless person should receive some remuneration ... or for that matter, should work a whole or partial shift of so many hours per day". Furthermore, as part of the judgment rendered in Witthuhn v. MNR 57 DTC 174 member W.S. Fisher states "... the basic intention of Parliament must have been to permit a deduction where an individual ... necessarily required the services of a full-time attendant by reason of the illness, infirmity or affliction of such individual".

It is our view, therefore, that the phrase "full-time" is not reasonably intended to place a requirement of a minimum time spent in attending a "cared-for" person by a particular attendant but rather it implies the constant care and attendance required by an individual by reason of the injury, illness or affliction of such individual. This requirement for constant care and attendance can be satisfied in whole or in part by a person(s) employed for that purpose in combination with other individuals (such as spouse, parent or other related persons) who may be in attendance during hours that their other commitments permit.

In applying the above conclusions to the circumstances set out in your memorandum, it is our view that if the disabled individual does not require constant attendance, whether active or precautionary, the provisions of subsection 110(1)(c)(iv) and (iv.1) cannot be invoked.

2. The second issue raised concerns the deductibility of the cost of special foods and preparations prescribed by a physician in the treatment of an illness but which are not dispensed by a licensed pharmacist. Paragraph 45(b) of IT-225R is applicable to the circumstances as described. Subparagraph 110(1)(c)(xiii) of the Act provides for the cost of such preparations as a deductible medical expense but only if the conditions set out in that subparagraph are met; i.e., the substance must be prescribed by a medical practitioner or dentist and purchased from a licensed pharmacist who has recorded the prescription. The particular article referred to in your memorandum, "Preparing Your Income Tax Returns" by Arthur Anderson & Company, is incomplete in that respect.

3. In order to be eligible as a deductible medical expense an item of special equipment, such as a custom designed and built vehicle, would have to be prescribed and listed in Regulation 5700. Since such a vehicle is not provided for in that regulation it does not qualify as a medical expense deductible under subparagraph 110(1)(c)(xii) of the Act with the exception of the power operated lift which allows him access to the vehicle. However, a press release dated June 3, 1987 issued by the Department of Finance announced additions to Regulation 5700 that will be effective for the 1987 taxation year. Among these additions is the cost of a conversion kit containing all the devices required to convert an existing van into one that can be used independently by persons confined to wheelchairs. We have been in contact with Finance who have indicated that where a vehicle has been custom built but includes devices that are contained in the kit they have no objection to allowing the taxpayer to claim the cost equivalent of all the items used that comprise the kit. For this purpose, they have provided a breakdown of the kit listing all the items and their approximate costs. A copy of the breakdown is attached for your information.

Under the circumstances described in your memorandum, if the costs involved were incurred in the 1987 taxation year it would be in order for the taxpayer to claim the cost of those devices on the list that were used in the construction of the truck.

We hope that we have been able to answer all aspects of your query.

Director Small business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch

Enclosure

              Devices for the Conversion of 
             a Van for the Mobility-Impaired

The following devices comprise the conversion "kit". Where any of these devices are acquired separately for use in converting other types of vehicles the stated costs may vary.

-  Transfer seat (90° swivel seat to permit 
   independent movement from a wheelchair to 
   the driver's seat)                                $1,900
-  Hand controls (for driving)                          700 
-  Steering device (to aid in one-hand control
   of the steering wheel)                               100 
-  Raised top and side doors (provides necessary
   head room for paraplegic drivers)                  2,400
-  Power door operator (allows independent access)    1,100
-  Subfloor (covers ribbed floor of van)                650
-  Power brake extension (a hand brake)                 100
-  Wheelchair passenger restraint system                275

   One time cost:                                    $7 225