SEP 22 1988
Small Business and General Division A. Humenuk 957-2135
SUBJECT: Medical expense deduction under subparagraph 110(1)(c)(vi)
We are responding to your memorandum of July 15, 1988, and subsequent conversations (Humenuk/Yu) wherein you requested our views as to whether payments to a retirement home or seniors' residence could qualify for a deduction under subparagraph 110(l)(c)(vi) of the Income Tax Act (the "Act"). In the specific situation which you have under review, the taxpayer has a doctor's certificate stating that she has a physical or mental handicap and requires the facilities and personnel provided by the retirement home in which she lives. You are specifically concerned with the definition of "care" as used in subparagraph 110(l)(c)(vi) of the Act.
Care is defined in the unabridged Random House Dictionary of the English language as "protection, charge," and as a verb "to watch over or be responsible for." As this definition is rather broad we think it can reasonably be restricted to that which is offered to persons who are unable to care for themselves. In Ontario, homes for the aged can admit anyone over the age of 60 who is unable to care for himself properly but not to such a degree as to require placement in a hospital or psychiatric facility. Although we were unable to find similar legislation in British Columbia, we noted that the situation could arise in British Columbia where the medical health officer could force an elderly person to move to a home for the aged if, upon inspection, the officer determined that said person was unable to care for himself or was a danger to others. The taxpayer's representative has pointed out that many extended care facilities have waiting lists and that seniors' residences are used in lieu of the more appropriate extended care facility. It would therefore seem likely that many seniors living in retirement homes or seniors' residences would require some sort of care.
The Canada Assistance Plan Regulations defines a home for special care to include, among other places, certain residential institutions which provide residents with supervisory, domiciliary, personal or nursing care. As individuals requiring personal or nursing care are likely covered by subparagraph 110(1)(c)(iv) or (v) of the Act, we will focus our attention on the situations similar to that described by the subject taxpayer where the only care required is supervisory or domiciliary.
Although the requirements of subparagraph 110(1)(c)(vi) appear less restrictive than those of subparagraphs 110(1)(c)(iv) and (v) in that the care need not be provided in a nursing home on a full time basis, there are several additional requirements for subparagraph 110(1)(c)(vi) that do not apply to subparagraphs 110(1)(c)(iv) and (v) of the Act. Subparagraphs 110(1)(c)(iv) and (v) refer to a prolonged and severe impairment whereas subparagraph 110(1)(c)(vi) refers to a handicap. Although the care referred to in subparagraph 110(1)(c)(vi) need not be given in a nursing home, it must be provided in a place which has equipment, facilities or personnel specially provided for the care of persons suffering from that specific handicap.
The Concise Oxford Dictionary defines "special" as "peculiar, not general or of a particular kind". It would, therefore, seem that the case envisioned by subparagraph 110(1)(c)(vi) of the Act is a type of care specifically designed for the needs of a person with that handicap whether by means of special equipment, facilities or specially trained personnel. Although a resident may require care in a retirement home, the deduction may not be available under subparagraph 110(1)(c)(vi) if the care is not specific for the nature of the handicap in question. For example, supervision would not generally be performed by specially trained personnel. However, a specific handicap such as that caused by Alzheimer's disease, might require specially trained personnel for supervision.
Without knowing the specific nature of the handicap, it would be difficult if not impossible to determine whether the facilities and personnel of a specific institution were specially provided for the care of a person suffering from said handicap. With respect to seniors' residences and retirement homes, it should be emphasized that old age is not a handicap by itself but rather the handicap would be some condition which may be associated with old age.
In the specific case at hand, the taxpayer's representative is of the view that the requirement of subparagraph 110(1)(c)(vi) of the Act is satisfied in that the home provides care by supplying a controlled environment, balanced diets and available care of nurses and attendants. As we do not know what the representative means by controlled environment, we cannot comment in even a general way. However, we would suggest that a dietician's service of providing balanced meals would not normally be specifically tailored to a specific handicap and although a dietician may have special training, such training is not likely to be specific to a certain type of handicap. From the representative's comments, we can assume that the attendant and nursing care are not required but merely available.
Therefore, although we cannot say that the care provided by a retirement home would never qualify for a deduction under subparagraph 110(1)(c)(vi) of the Act, in the present case we have insufficient information to make such a determination. We are not suggesting that you dispute the doctor's certificate; however, as agreed by the taxpayer's representative, XXXX in the letter dated September 17, 1987, further clarification may be obtained from the physician to determine the nature of the handicap and what specialized facilities or personnel are provided by the retirement home to care for persons with said handicap. Should the taxpayer wish to make further representation we would be pleased to review the matter in further detail.
We trust our comments will assist you.
Director General Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch