2015-0567251E5 Fees to access hydrotherapy pool

Principal Issues: Whether fees paid to access a special pool that is accessible by those with physical or mental handicaps would be an eligible medical expense for purposes of the medical expense tax credit?

Position: They do not appear to be eligible medical expenses in this situation.

Reasons: The fees do not fall within the eligible expenses listed under subsection 118.2(2).

Author: Wirag, Eric
Section: 118.2(2)

XXXXXXXXXX                     
                                                                                                                                                            2015-056725
                                                                                                                                                            Eric Wirag, CPA, CMA
                                                                                                                                                            (613) 670-9053

May 13, 2015

Dear XXXXXXXXXX,

As per our telephone conversation of March 20, 2015 (Wirag/XXXXXXXXXX), we are providing comments regarding whether fees paid to access the XXXXXXXXXX are eligible for the medical expense tax credit.  We also acknowledge your letter dated November 19, 2014. 

It is our understanding that the XXXXXXXXXX is a hydrotherapy pool for use by those with physical disabilities, and the fees paid to the pool are for access to use the facilities.  You state that access to the pool is only available to people with disabilities that have provided the appropriate applications completed by a physician. 

Our comments:

This technical interpretation provides general comments about the provisions of the Income Tax Act (the “Act”) and related legislation (where referenced).  It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination.  The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R6, Advance Income Tax Rulings and Technical Interpretations.

Subsection 118.2(2) of the Act describes the types of medical expenses that are eligible for the medical expense tax credit.  If a particular expenditure is not described in subsection 118.2(2), or if the requirements under which the expenditure would qualify are not met, the expenditure is not eligible for the medical expense tax credit, even though the expenditure may have been incurred for medical reasons.  The Canada Revenue Agency’s general views regarding the medical expense tax credit can be found in Income Tax Folio S1-F1-C1: Medical Expense Tax Credit (the “Folio”), at http://www.cra-arc.gc.ca/tx/tchncl/nc mtx/fls/s1/f1/s1-f1-c1-eng.html.

Paragraph 118.2(2)(a) of the Act allows as an eligible medical expense an amount paid to a medical practitioner, dentist or nurse or to a public or licensed private hospital in respect of medical services provided to a patient.  Under paragraph 118.2(2)(a), the fees paid for use of the pool facility would only qualify as an eligible medical expense if they were paid to a medical practitioner, dentist or nurse or to a public or licensed private hospital in respect of medical services.  Medical services are diagnostic, therapeutic or rehabilitative services that are performed by a medical practitioner acting within the scope of his or her professional training.  The Folio contains additional information about paragraph 118.2(2)(a) in paragraphs 1.20 to 1.30.   

Paragraph 118.2(2)(e) of the Act allows as an eligible medical expense amounts paid to a school, institution or another place if specific requirements are met.  One of these requirements is that the amount must be paid for the care, or the care and training of the patient who suffers from a physical or mental handicap.  The patient must also require the equipment, facilities or personnel specially provided by that school, institution or other place for the care or the care and training of persons suffering from the handicap suffered by the patient.  More information on paragraph 118.2(2)(e), including an explanation of the additional requirements of this paragraph, can be found in paragraphs 1.56 to 1.63 in the Folio.

Finally, paragraph 118.2(2)(l.9) of the Act allows certain expenses for therapy provided to a patient because of the patient’s severe and prolonged impairment.  The expense must be an amount paid as remuneration for the therapy provided to a patient.  There are several other conditions that must be met in this paragraph, one of which is that the therapy must be prescribed by, and administered under the general supervision of either a medical doctor or an occupational therapist, in the case of a physical impairment, or a medical doctor or psychologist, in the case of a mental impairment.  Paragraphs 1.115 and 1.116 of the Folio provide additional comments regarding the requirements under paragraph 118.2(2)(l.9). 

Based on the information given, it appears that the fees paid to access the facilities of the pool are not described in subsection 118.2(2) of the Act and would not be eligible for the medical expense tax credit. 

We trust our comments will be of assistance.

Yours truly,

Pamela Burnley, CPA, CA
Manager, Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate

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