Date: 20021007
Docket: 2002-1444-IT-I
BETWEEN:
RONALD M. SROGEN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Bowie J.
[1] Mr. Srogen lives in a senior citizens' home called Gilmore Gardens in Richmond B.C. He went to live there on June 1, 2000. He pays $2,480 per month to live there, so in the year 2000 he paid a total of $17,360. In filing his income tax return for the year, he took the position that he was entitled to deduct that amount as a medical expense under section 118.2 of the Income Tax Act (the Act). The Minister did not agree with him, and so in assessing he disallowed the deduction. Mr. Srogen now appeals from his assessment. When he got to Court he took a different position; he now claims that he is entitled to deduct 32% of the amount that he paid, or $5,555.20. That is because the annual payroll of Gilmore Gardens amounts to 32% of its gross revenues for the year. As I understood his argument, it was that 32% of his payments go to pay for attendant care, and so that portion should be deductible under section 118.2 of the Act.
[2] Subsection 118.2(2) has many paragraphs, all making provision for deductions from income in relation to medical expenses. The following are the ones that might conceivably have some application in a case of this sort.
118.2(2)For the purposes of subsection 118.2(1), a medical expense of an individual is an amount paid
(a) ...
(b) as remuneration for one full-time attendant (other than a person who, at the time the remuneration is paid, is the individual's spouse or common-law partner or is under 18 years of age) on, or for the full-time care in a nursing home of, the patient in respect of whom an amount would, but for paragraph 118.3(1)(c), be deductible under section 118.3 in computing a taxpayer's tax payable under this Part for the taxation year in which the expense was incurred;
(b.1) as remuneration for attendant care provided in Canada to the patient if
(i) the patient is a person in respect of whom an amount may be deducted under section 118.3 in computing a taxpayer's tax payable under this Part for the taxation year in which the expense was incurred,
(ii) no part of the remuneration is included in computing a deduction claimed in respect of the patient under section 63 or 64 or paragraphs (b), (b.2), (c), (d) or (e) for any taxation year,
(iii) at the time the remuneration is paid, the attendant is neither the individual's spouse or common-law partner nor under 18 years of age, and
(iv) each receipt filed with the Minister to prove payment of the remuneration was issued by the payee and contains, where the payee is an individual, that individual's Social Insurance Number,
to the extent that the total of amounts so paid does not exceed $10,000 (or $20,000 if the individual dies in the year);
(b.2) as remuneration for the patient's care or supervision provided in a group home in Canada maintained and operated exclusively for the benefit of individuals who have a severe and prolonged impairment, if
(i) because of the patient's impairment, the patient is a person in respect of whom an amount may be deducted under section 118.3 in computing a taxpayer's tax payable under this Part for the taxation year in which the expense is incurred,
(ii) no part of the remuneration is included in computing a deduction claimed in respect of the patient under section 63 or 64 or paragraphs (b), (b.1), (c), (d) or (e) for any taxation year, and
(iii) each receipt filed with the Minister to prove payment of the remuneration was issued by the payee and contains, where the payee is an individual, that individual's Social Insurance Number;
(c) as remuneration for one full-time attendant on the patient in a self-contained domestic establishment in which the patient lives, if
(i) the patient is, and has been certified by a medical practitioner to be, a person who, by reason of mental or physical infirmity, is and is likely to be for a long-continued period of indefinite duration dependent on others for the patient's personal needs and care and who, as a result thereof, requires a full-time attendant,
(ii) at the time the remuneration is paid, the attendant is neither the individual's spouse or common-law partner nor under 18 years of age, and
(iii) each receipt filed with the Minister to prove payment of the remuneration was issued by the payee and contains, where the payee is an individual, that individual's Social Insurance Number;
(d) for the full-time care in a nursing home of the patient, who has been certified by a medical practitioner to be a person who, by reason of lack of normal mental capacity, is and in the foreseeable future will continue to be dependent on others for the patient's personal needs and care;
(e) for the care, or the care and training, at a school, institution or other place of the patient, who has been certified by an appropriately qualified person to be a person who, by reason of a physical or mental handicap, requires the equipment, facilities or personnel specially provided by that school, institution or other place for the care, or the care and training, of individuals suffering from the handicap suffered by the patient;
(f) ...
[3] Mr. Srogen is 80 years old, and he is not in the best of health. As the result of spinal stenosis, he has such difficulty walking that counsel for the Respondent conceded at the hearing before me that he is entitled to receive the disability tax credit under section 118.3 of the Act for the year 2000. He also has diabetes, which is treated with insulin and careful control of his diet. He and the chef collaborate to ensure that his meals are suitable. He has high blood pressure, for which he takes medication, and he has suffered from depression since the death of his wife. However, he is able to get around with the use of a walker, he drives a car, and he is able to live and care for himself relatively independently. He visits his family physician from time to time at his office.
[4] Gilmore Gardens was described by Ms. Oke, the manager of the facility, as an independent seniors' residence which offers assisted living, or supported living, to its residents. All the residents are elderly, but they are generally, like Mr. Srogen, able to look after most of their daily living requirements for themselves. Gilmore Gardens offers suites of varying sizes and a staff to assist the residents by providing such services as meal preparation, transportation for shopping and to doctors' offices for those who need it, housekeeping and cleaning. Dinner is provided in a dining room each night, but residents may have it delivered on a tray if they are ill. Lunch is a less formal affair, to which the residents help themselves, but the food is prepared in the kitchen by the staff. Mr. Srogen gets his own breakfast in his suite.
[5] Mr. Srogen's suite has two bedrooms, a living room, a bathroom and a small kitchen. Laundry facilities are available to him nearby. He has panic buttons in his suite, and there are others in the hallways and common areas of the building. Many residents choose to have a panic alarm that they wear at all times. If one of these is pressed there is always at least one staff member whose duty it is to respond to the alarm immediately. All staff members are trained in first aid and CPR. The assistant manager is a nurse, although that was not so in 2000. Mr. Srogen generally monitors his own blood pressure, but the nurse would do it for him if he wished. There is a hairdressing salon on the premises, and a small store where the residents can purchase some basic foodstuff and other supplies. A wellness clinic operates on a weekly basis, with guest speakers addressing the residents on topics related to health and seniors' issues. In short, Gilmore Gardens is a fairly typical seniors' residence, but it is not a nursing home and it does not provide treatment of any sort to the residents. The staff members provide assistance to residents in a variety of ways, but none of them are dedicated to providing assistance to one resident. Some of the residents do require and have daycare services, but they contract for that separately with other providers. Mr. Srogen does not have any such daycare service.
[6] I am unable to agree with the Appellant's contention that 32% of the amount he pays to Gilmore Gardens each year is deductible under section 118.2 of the Act. Paragraph 118.2(2)(b) provides for the deduction of remuneration for a full-time attendant, or for full-time care in a nursing home. Mr. Srogen does not have a full-time attendant, and Gilmore Gardens is not a nursing home.
[7] Paragraph 118.2(2)(b.1) provides a deduction for an amount paid as remuneration for attendant care provided to a patient. It apparently does not require that the attendant be a full-time one, but I think it is obvious from the context that the attendant must be dedicated on at least a part-time basis to the taxpayer for this paragraph to be applicable. In any event, Mr. Srogen is not a patient of Gilmore Gardens. Nor does his contract with Gilmore Gardens make any provision to pay an amount for attendant care.
[8] Paragraph 118.2(2)(b.2) provides a deduction for remuneration paid for care or supervision of a patient in a group home operated exclusively for the benefit of individuals who have a severe and prolonged impairment. Although Mr. Srogen has a severe and prolonged impairment, Gilmore Gardens cannot be said to be operated exclusively for people who have such impairments.
[9] Paragraph 118.2(2)(c) provides a deduction for remuneration paid for a full-time attendant. Mr. Srogen has no full-time attendant.
[10] Paragraph 118.2(2)(d) provides a deduction for full-time care in a nursing home. Gilmore Gardens is not a nursing home, and so it does not qualify.
[11] Paragraph 118.2(2)(e) provides a deduction for amounts paid for care, or care and training, at a school, institution or other place of a patient if a qualified person has certified that by reason of a physical or mental handicap they require the "equipment, facilities or personnel specially provided" there for their care or care and training. Mr. Srogen obtained a letter from Alan A. Macdonald M.D. which became Exhibit A-2 at the hearing of his appeal. The pertinent paragraph of that letter reads as follows:
Mr. Srogen is diabetic (NIDDM), hypertensive, and suffers from spinal stenosis which requires the use of a walker or canes to get about. He has also suffered from reactive depression since the death of his wife, and so requires the environment and services of a place like Gilmore Gardens for physical and emotional support. I would judge the monthly fees he pays there to be a justifiable medical expense.
[12] The Federal Court of Appeal dealt with a similar certification in The Queen v. Title Estate.[1] The relevant part of the doctor's certificate in that case read:
This person requires a supervised setting since January 31, 1995 due to medical illness.
This person requires a 24-hour companion.
The Court held that this certificate was inadequate, both because it failed to specify the handicap from which the patient was suffering, and also because it did not specify the equipment, facilities or personnel that the patient required in order to obtain the care or training needed to deal with that handicap. Dr. Macdonald's certificate does specify Mr. Srogen's ailments, but his statement that Mr. Srogen "requires the environment and services of a place like Gilmore Gardens for physical and emotional support" is similarly lacking in particulars of the equipment, facilities or personnel required for Mr. Srogen's care or training, and so does not satisfy the requirements of paragraph 118.2(2)(e). I make no finding as to whether Gilmore Gardens would qualify as a "school, institution or other place" as that expression is used in paragraph 118.2(2)(e).
[13] The appeal would be dismissed, but for the concession made by counsel for the Respondent at the hearing that I should allow the appeal to permit the Appellant to receive the disability tax credit under section 118.3. Instead, it is allowed and the assessment is referred back to the Minister for reconsideration and reassessment on the basis that the Appellant is entitled to the disability tax credit under section 118.3, but is not entitled to any deduction for amounts paid to Gilmore Gardens.
Signed at Ottawa, Canada, this 7th day of October, 2002.
|
"E.A. Bowie" |
J.T.C.C.
COURT FILE NO.: 2002-1444(IT)I
STYLE OF CAUSE: Ronald M. Srogen and
Her Majesty the Queen
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: September 26 and 27, 2002
REASONS FOR JUDGMENT BY: The Honourable Judge E.A. Bowie
DATE OF JUDGMENT: October 7, 2002
APPEARANCES:
For the Appellant: The Appellant himself
Counsel for the Respondent: Johanna Russell
COUNSEL OF RECORD:
For the Appellant:
Name: N/A
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2002-1444(IT)I
BETWEEN:
RONALD M. SROGEN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on September 26 and 27, 2002, at Vancouver, British Columbia, by
the Honourable Judge E.A. Bowie
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Johanna Russell
JUDGMENT
Upon concession made by the Respondent, the appeal from the assessment of tax made under the Income Tax Act for the 2000 taxation year is allowed and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment on the basis that the Appellant is entitled to a disability tax credit under section 118.3 of the Act, but is not entitled to any deduction for amounts paid to Gilmore Gardens.
Signed at Ottawa, Canada, this 7th day of October, 2002.
|
"E.A. Bowie" |
J.T.C.C.