13 May 1992 Income Tax Severed Letter 920412 - Social Assistance Payments - Self-Managed Care Project of Alberta

B. Fioravanti
         19(1)                         Tel: (613) 957-2073
                                       Fax: (613) 954-0896
                                       HBW

May 13, 1992

Dear 19(1)

Re: Tax Aspects Of The Self Managed Care Project

Your letter of December 19, 1991, concerning the above-captioned matter has been referred to this Division. We apologize for the delay in responding.

Since the payments under the Self Managed Care Project are made "on a means, needs or income test" they are considered to be social assistance payments for purposes of paragraph 56(1)(u) and subparagraph llO(l)(f)(iii) of the Income Tax Act. As a result the payments would be included in the individual's net income which is taken into consideration in calculating the refundable tax credits. These payments are deducted from the net income in arriving at taxable income and, as you know, are not taxable.

If, in fact, these amounts had been expended by Alberta Health in providing home care sevices directly to the individuals, it is understood that their entitlement to tax credits and other entitlements would not be impaired. In view of the policy implications, we have forwarded a copy of your letter to officials of the Department of Finance for their consideration and have asked them to reply directly to you .

We trust this will be of assistance.

Yours sincerely,

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