If you have selected home care, you may be interested in knowing what tax deductions, tax credits or benefits might be applicable. Some of these are available to the "home care patient" while others apply to eligible family members.

In this article, we will examine the Attendant Care Tax deduction, the Caregiver Tax credit and Compassionate Care Benefits. These and other related topics were discussed in my series of articles on Eldercare/CA PrimePlus Services*.

Attendant Care Expenses is a Tax Deduction. It is available to the "home care patient" and cannot be transferred. Attendant Care is care provided by an attendant who performs those personal tasks which the person with a disability is unable to do for him or herself. Such tasks could include meal preparation, feeding assistant, maid and cleaning services, health care (such as registered nurse, practical nurse, certified health care aids, personal support worker), transportation, and personal services, such as banking and shopping.

The maximum amount that is deductible is two-thirds of your "earned income".

There are a number of conditions to satisfy:

• You are qualified to claim the Disability Tax Credit (although the tax credit might have been transferred to a spouse or supporting person). This credit is available to persons who have a severe mental or physical impairment. This impairment cause you to be markedly restricted in all or almost all of the time in your basic activities of daily living, and the impairment has lasted or is expected to last for a continuous period of at least 12 months. A medical professional has to sign Form T2201 if this is your first time claiming this credit
  
  
• No one else has claimed the payments as Medical Expenses Tax Credit.
  
  
• The attendant is not your spouse.
  
  
• The attendant was at least 18 years of age at the time when payments were made.
  
  
• The attendant care must be provided in Canada (except if you are absent some of the time and still a resident for tax purposes).
  
  
• The expenses were paid, and not reimbursed, to enable you to earn income, receive occupational training for which you received a training allowance under the National Training Act, or carry on research or similar work for which you received a grant.

If you have no "earned income" and therefore cannot claim a deduction for the Attendant Care Expenses, these can claimed as a Medical Expense Tax Credit (maximum federal tax credit of $10,000 or $20,000 in the year of death). This tax credit can be transferred to your spouse or relative whom you are dependent upon.

In the case of persons who have a severe and prolonged mobility impairment or who lacks normal physical development, reasonable expenses relating to renovations or alterations to the person's dwelling can be claimed as a Medical Expense Tax Credit. To qualify, these expenses must be paid to enable the person to access the dwelling or be mobile or functional within it.

For more details on the Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, refer to the CCRA's Interpretation Bulletin IT-519R2.

The Caregiver Tax credit is available to taxpayers who (alone or jointly) provide home care for a parent or grandparent (65 or older), or a mentally or physically infirm dependant age 18 or over. Certain conditions apply in the case of a dependant age 18 and over. We will not discuss all the conditions in this article.

The Caregiver amount Tax Credit is $3663 (2003 and indexed). In the case of minor children, the 2004 Federal Budget specifies that medical expenses will be pooled with those of the taxpayer and his/her spouse, without regard to the income of the minor. In the case of dependant relative (other than a minor), medical expenses qualify for the credit if the amount exceeds the dependant's medical expense threshold.

The Compassionate Care Benefit is available starting January 4, 2004. This is not an Income tax deduction or tax credit but is provided under the Employment Insurance Act.
This Benefit is available to those who are caring for a gravely ill family member. This benefit can be shared with other eligible caregivers.

To qualify:

• You must apply to the Human Resources Development of Canada (HRDC) office and provide medical proof that the ill family member requires support or care and is at significant risk of death within 26 weeks.
  
  
• A medical certificate called "Medical certificate for Employment Insurance Compassionate Care Benefits" must be completed and signed by a medical doctor or other medical practitioner authorized to treat the gravely ill family member.
  
  
• You should request a Record of Employment (ROE) from your employer, or provide proof of employment (such as T-4, or pay stubs).
  
  
• You must also show that your regular weekly earnings from work have been reduced by more than 40% and you have accumulated 600 insured hours in the last 52 weeks or since the beginning of your last claim.

This benefit can be shared with other eligible caregivers who must also apply. The number of weeks you will share with other members of your family should be decided and agreed amongst each family member at the time you apply. The first person to receive the Compassionate Care Benefit will serve a 2-week waiting period. Under certain circumstances, the 2-week waiting period may be waived or deferred.

Family members include:

• Your child or the child of your spouse or common-law partner.
• Your husband/wife or common-law partner.
• Your mother/father.
• Your mother's husband or your father's wife.
• The common-law partner of your mother/father.

Care or support to a family member means:

• Providing psychological or emotional support, or
• Arranging for care by a third party, or
• Directly providing or participating in the care.

The basic Compassionate Care Benefit is 55% of your average insured earnings. The maximum is $413 per week. Your EI payment is taxable income. Higher benefits are available to low-income families.

When you file your tax return, you will not have to repay any of the Compassionate Care Benefits. However, if you received Compassionate Care Benefit and regular benefits within the same taxation year, you may be required to repay some or all of the regular benefits.

For more details, refer to the HRDC's web site.

* CA PrimePlus Services is a registered trademark of the Canadian Institute of Chartered Accountants. Eldercare/CA PrimePlus Services is a customizable range of financial management services for elderly and disabled persons.

Anne Chun, C.A. CFP is the principal of Anne Chun Professional Corporation, providing financial, tax, estate and Eldercare services. She is also the co-author of "Planning your Financial Future". Find out more from her web site www.annechun.ca.

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