The Burden of Care For the Sick and Disabled

.... but tax assistance is available

It is an increasing expectation of the health care system across Canada today that the family will participate proactively in the care of their severely ill family members. This is a noble and honorable privilege, but it can also be exhausting and expensive, affecting workplace productivity as people leave to provide care, but also challenging the resources of the family, who may also be funding several children through university or preparing for their own retirement in a difficult environment.

Fortunately the federal government has a host of tax preferences that can help. We will discuss some of them below:

The credit will applies to eligible expenditures of more than $1,000, but not more than $10,000, resulting in a maximum credit of $1,350 ($9,000 x 15%). To be eligible, expenditures incurred in relation to a renovation or alteration to an eligible dwelling (or the land that forms part of the eligible dwelling), must be of an enduring nature and integral to the dwelling, and includes the cost of labour and professional services, building materials, fixtures, rentals, and permits.

If the eligible expenses under the Home Renovation Tax Credit also qualify for the Medical Expense Tax Credit, described below, they can in fact be claimed under both provisions.

The following expenditures will not be eligible for the HRTC:

• the cost of routine repairs and maintenance normally performed on an annual or more frequent basis;
• expenditures that are not integral to the dwelling, and other indirect expenditures that retain a value independent of the renovation;
• expenditures for appliances and audio-visual electronics; and
• financing costs.

2. RENOVATIONS UNDER THE MEDICAL EXPENSE TAX CREDITS

Incremental costs of building or modifying a new home for a patient who is physically impaired or lacks normal physical development where those costs are incurred to enable the patient to gain access to or be functional within the home may also qualify as medical expenses. Examples of home renovations that would be eligible are:

• the cost of installing entrance and exit ramps
• widening of doorways
• lowering shelves
• modifying kitchen cabinets
• moving electrical outlets.

Examples of ineligible home renovations include the installation of hardwood floors or hot tubs.

The types of structural changes that could be eligible are not restricted to the above examples. "Reasonable expenses" pertaining to a particular structural change may include payments to an architect or a contractor.

3. THE ATTENDANT CARE AMOUNT

A deduction is available for attendant care expenses, and is available to individuals who are entitled to claim the disability tax credit.  The expenses must allow the disabled person to pursue employment or education.

4. CAREGIVER AMOUNT

S. 118(1)(c.1) provides that a taxpayer who supports and lives with an infirm dependant in a home which the taxpayer maintains may claim a specified amount for that dependant as a non-refundable credit against taxes payable. To qualify, the dependant must meet these three criteria:

• be at least 18 years old,
• be either
  • the child or grandchild of the taxpayer or the taxpayer's spouse or common-law partner, or
  • the parent, grandparent, brother, sister, uncle, aunt, niece or nephew of the taxpayer or the taxpayer's spouse or common-law partner and resident in Canada at any time in the year, and
• be either
  • the taxpayer's parent or grandparent and at least 65 years old or
  • dependent on the taxpayer because of mental or physical infirmity.

5. DISABILITY AMOUNT

S. 118.3 allows a taxpayer with "a severe and prolonged impairment in mental or physical functions" to claim a specified amount as a non-refundable credit against taxes payable.

Basic Disability Amount is a non-refundable tax credit that acknowledges the expenses incurred corresponding to the treatment of a mental or physical impairment. This amount is available to all taxpayers who qualify.

A supplementary disability credit is available for taxpayers who are under 18 years old. The amount of the supplement is decreased by any child care expenses claimed in respect of the child (in excess of the base child care amount) plus any portion of the disability supports deduction that relates to care or supervision of the child in excess of a base amount. CRA does not provide a separate form for the calculation of the Disability Amount, but provides a section on the Federal Worksheet to perform the calculation.

The base child care amount is the legislated maximum (S. 118.3(1)(a.3)) amount of child care expenses that may be claimed in respect of a disabled minor without reducing the supplementary disability amount.