Most People Miss Claiming Medical Expenses

Canada’s per capita spending on health care was among the highest internationally, at CA$8,119 and even so, the amount of money Canadians spend out-of-pocket on private health care and insurance also exceeds the OECD average, according to a recent report by the Canadian Institute for Health Information (CIHI).  This is especially difficult for cancer patients, for whom out-of-pocket costs can be astronomical.   A silver lining is that some of those costs may be recoverable through the personal tax system.  Here’s an overview of the kind of write-offs most people miss, and some of the complexities that come with the claims.

Net Income Requirements. Claims for medical expenses, may be made for any 12-month period ending in the tax year.  In addition, they must be reduced by 3% of net income or a maximum of $2834 in the 2025 tax year.  That makes it more lucrative for a lower income earner to claim them.  But if that person is too ill to work, or income is too low to be taxable a supporting person can attempt the claim; albeit reduced by this net income limitation.

Specifically, a supporting person can make a claim for a spouse, common-law spouse and either of those individual’s minor children.   The net income limitation that can reduce medical costs incurred is then based on that supporting person’s higher net income.

It is also possible to make a claim for other adults dependent upon a supporting person; in that case, you can use the adult dependant’s net income for the purposes of claiming medical expenses.   Claims can be made for grandchildren, parents, grand-parents, brothers, sisters, uncles, aunts, nephews, or nieces who were residents of Canada at any time in the year.

Cost of Drugs, Devices.   Medical expenses claimable by someone with a chronic illness such as cancer include the following:

• Air filters, air conditioners, assisted breathing devices
• Bone marrow transplant costs
• Breast prothesis
• Cancer treatments – inside or outside Canada
• Chairs, Special devices
• Ileostomy and colostomy pads
• Out of pocket prescription drugs

Costs of attendant care.  Attendant care expenses may be deductible under a claim for medical expenses, although in the case of attendant care, these costs may affect a claim for the Disability amount if they exceed $10,000 in a year (or $20,000 in the year a taxpayer died).  Attendant care costs can include an out patient clinic and even a detox centre, but not a recreational facility.  Certain portions of a retirement home might be deductible; so may wages for hiring a private attendant.

Claiming Home Renovations.  When alterations are made to a home to allow a taxpayer or a dependant be more mobile or functional within the home, it’s possible to accomplish a rare, and legal double-dip that started on the 2020 tax return. 

First, when alterations or renovations are made to a dwelling to allow a taxpayer who is either over the age of 65 or disabled (as verified by a Disability Tax Credit on form T2201) it is possible to claim the Home Accessibility Tax Credit. 

This is a federal non-refundable credit of 15 percent of the lesser of the costs of the renovations and $20,000; in real dollar terms a maximum of $3000. Claims for the Home Accessibility Tax Credit must be made in the year that the expenses are incurred. They are claimed on the Worksheet for the Return; a part the T1 forms package.

Those same renovations may qualify to be claimed as a medical expense. But that can be the more complicated claim. Here’s why. 

Remember that claims for medical expenses, may be made for any 12-month period ending in the tax year. Where the medical expense claim period crosses the year end, the Home Accessibility claim may be in one year and the medical expense claim in another.   Also, the claims may be different of that 3% of net income limitation. 

Examples of home renovations that would be eligible for both credits include the costs of:

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

The Disability Amount.  It’s worth mentioning that the Disability Amount, which applies if the disabled person is markedly restricted in their daily living activities, is one of the most lucrative non-refundable tax credits.  As mentioned, it requires Form T2201 Disability Tax Credit, signed by a nurse practitioner or qualified medical practitioner. It is a claim of $10,138 in 2025 for adults and up to $5914 more for disabled children, depending on the amount of child care expenses claimed. 

Other Tax Credits.  There are numerous other provisions a supporting individual may claim to supplement the costs of caring for a disabled person.  This may include the Canada Caregiver Amount of over $8600; and if you  have to move a person for whom you give and who qualifies for a Disability Tax Credit, into a more accessible home to accommodate the disability, a $10,000 Home Buyer’s Amount is claimable.  These credits are non-refundable, which means you need to have income to get a tax benefit.  However, there is also a refundable multi-generational home renovation tax credit, which supplements home reno costs up to $50,000, to enable living quarters for a disabled person living on your property in a secondary unit.  Expenses need to have occurred after December 31, 2022.

The Refundable Medical Expense Supplement.  Another thing to keep in mind:  disabled taxpayers who have no supporting person, but who have at least $4390 of earned income in 2025 may also claim up a refundable amount of up to 25 percent of the medical expenses under the Refundable Medical Expense Supplement to a maximum of $1504.

Bottom line:  Three are lots of supports for disabled people and their caregivers via the personal tax system, but they can be hard to navigate and calculate.  It really pays to get help from a DMA -Tax Services Specialist when there is a disabled person in the family.  This highly qualified specialist can prepare the tax return using a variety of several different “what if” scenarios to demonstrate the maximum benefit for the household in these cases.

Or you may wish to consider achieving the credentials to help people in your community get all the tax benefits they qualify for.  If so, consider enrolling in the DMA -Tax Services Specialist program.  It is available online so you can start immediately.