January 29, 1990
Enquiries and Taxpayer Business and General Assistance Division Division Mrs. P. McNally J.D. Jones Director 957-2104
L. Pulcine
Medical Expenses 7-4642
This is in reply to your memorandum of January 10, 1990, wherein you requested our opinion as to whether medical expenses incurred by individuals receiving care in a nursing home, senior citizen residence, home for the aged or similar institution includes the "medical" portion only or board, and lodging.
It is your understanding that all costs, including board and lodging, incurred by a taxpayer for the "full-time" care in a nursing home may be included as a medical expense pursuant to paragraph 118.2(2)(d) of the Income Tax Act (the "Act") provided the taxpayer has been certified by a medical practitioner to be a person who, by reason of lack of norms mental capacity, is and in the foreseeable future will continue to be dependent on others for his personal needs and care.
It is also your understanding that all costs, including board and lodging, incurred by a taxpayer may be considered a medical expense pursuant to paragraph 118.2(2)(e) of the Act if a taxpayer is certified by an appropriately qualified person to be an individual who, by reason of physical or mental handicap requires the equipment, facilities or personnel provided by a senior citizens' residence, home for the aged `or a similar institution.
You also state that an individual who resides in a senior citizens' residence home for the aged or similar institution makes their payment to a corporate entity and, accordingly, it is your view that the above payment of the "medical expense portion" would not qualify pursuant to paragraph 118.2(2) (a) of the Act as the amount is not an amount paid "to a medical practitioner, dentist or nurse or a public or licensed private hospital" as is required by that paragraph. It is also your understanding that senior citizens do not pay for drugs or any type of medical attention. A home or institution can give a resident a breakdown of the amount applicable to their payment with respect to the portion that would be regarded as the medical portion based on the overall budget for that particular home or institution.
Based upon the above, we will respond to your questions in the order in which they were posed.
It is our view that, depending upon the circumstances, the total amount paid by an individual to a nursing home, including board and lodging, may qualify as a medical expense pursuant to paragraph 118.2(2)(d) of the Act. While there is no definition in the Act of a nursing home, it is expected that there would be qualified medical personnel in attendance of a calibre and in sufficient numbers to provide nursing care to the patients on a 24-hour basis. We also advise that full-time care means constant care, whether active or precautionary. If, in fact, a payment to a nursing home otherwise qualifies as a medical expense under subsection 118.2(2) of the Act, it is our view that all reasonable fees paid to that nursing home for full-time care qualify as a medical expense whether the fees include an amount for food, accommodation or nursing care. Payment in respect of recreational services such as those normally found in a nursing home would also qualify. However, fees paid for identifiable personal expenses, such as hairdresser's fees, would not qualify as a medical expense.
It is also our view that provided all the requirements of paragraph ll8.2(2)(e) of the Act have been met, the total amount paid (other than identifiable personal expenses as discussed previously) by an individual to a senior citizens' residence, home for the aged or similar institution, including board and lodging, would qualify as a medical expense pursuant to paragraph ll8.2(2)(e) of the Act. We advise, however, that it would be a question of fact as to whether a seniors' residence, home for the aged or similar institution could be said to be a school, institution or other place providing specialized care, training, equipment or facilities for handicapped individuals as specified in paragraph 1l8.2(2)(e) of the Act. In this regard we have previously given our opinion that fees paid to a seniors' residence which provides the residents with accommodation, meals, social programming and activities, building and personal security (including medication control and minimum physical assistance such as bathing and health promotion programming) as well as other miscellaneous services (including a registered nurse on staff 24 hours per day, seven days per week) would not qualify as a medical expense but, rather, would be regular personal and living expenses.
Where a taxpayer is residing in a senior `citizens' home, a home for the aged or a similar institution but all of the requirements pursuant to paragraph ll8.2(2)(e) of the Act have not been met (the taxpayer has not been certified by an appropriately qualified person) the amount paid and shown on a receipt issued by the institution or home as the "medical portion" of the individual's costs incurred would, in our view, not be an eligible medical expense under any of paragraphs 118.2(2) (a), (b), (d) or (e) of the Act.
B.W. Dath Director Business and General Division Specialty Rulings Directorate legislative and Intergovernmental Affairs Branch