2017-0724351I7 Disability tax credit - lab tests as therapy

Principal Issues: Whether time spent for lab tests should be included in the time spent administering therapy for purposes of the disability tax credit.

Position: Question of fact.

Reasons: The activities required for the administration of Life Sustaining Therapy as described in paragraph 118.3(1)(a.1) would be determined in each specific case based on the effects of an individual’s impairments.

Author: Wirag, Eric
Section: 118.3

                                                                                                                                                           March 8, 2018

Brenda Watkins                                                                                                                                  HEADQUARTERS
Director                                                                                                                                               Income Tax Rulings
Benefit Partnerships and Services Division                                                                                        Directorate
Benefit Programs Directorate                                                                                                              Eric Wirag, CMA, CPA

                                                                                                                                                            2017-072435

Life-sustaining therapy – blood tests

As a result of the Adverse Decision Committee meeting on September 21, 2017 for the Mullings decision (Mullings v the Queen (2017 TCC 133)), we have been asked to review whether the time spent for lab tests would be included in the time spent administering therapy as described in paragraph 118.3(1)(a.1) of the Income Tax Act (the “Act”).

Our Comments

It is our view that it is a question of fact whether the determination of a specific activity, for example a weekly blood test, can be included in the time spent administering therapy as described in paragraph 118.1(1)(a.1) of the Act.  The determination of the activities that are considered to be therapy would be dependent on the effects of the impairment on the individual, and what is essential to sustain a vital function of the individual.  What would be considered essential to one person’s impairment may not be considered essential to another.  As stated in paragraph 118.3(1.1)(a), only time spent on activities that require the individual to take time away from normal everyday activities in order to receive the therapy would be included.

In Mullings, the court found that, for the purpose of paragraph 118.1(1)(a.1) of the Act, the therapy was administering a precise amount of amino acid phenylalanine “Phe” every day.  In that case, weekly blood tests were required to ensure that the proper Phe level was being maintained.  Without the blood test, the precise amounts of Phe to be administered could not be determined.  Therefore, in our opinion, the weekly blood tests in this case would likely be considered an activity that would be included in the time spent administering therapy. This does not mean that all time for blood tests, in all situations, would be considered an activity included in administering therapy.

We note that although the blood tests could be considered time spent administering therapy, any travel time to and from a blood test would be specifically excluded as per paragraph 118.3(1.1)(d) of the Act.

Although paragraph 118.3(1.1)(d) of the Act specifically excludes time spent on activities related to medical appointments, it is our view that an appointment where therapy is actually received would not fall under this exclusion.

Unless exempted, a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Canada Revenue Agency’s electronic library. After a 90-day waiting period, a severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. You may request an extension of this 90-day period. The severing process removes all content that is not subject to disclosure, including information that could reveal the identity of the taxpayer. The taxpayer may ask for a version that has been severed using the Privacy Act criteria, which does not remove taxpayer identity. You can request this by e-mailing us at: ITRACCESSG@cra-arc.gc.ca. A copy will be sent to you for delivery to the taxpayer.

Yours truly,

Lita Krantz, CPA, CA
Manager, Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

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