a Person was diagnosed with dementia by a specialist and can not operate on her own anymore but needs to stay in a special facility where care is taken of her by qualified personnel. She is above 65. Will the expense to stay at this facility qualify as a
Important:
This answer is based on tax law year ending 28 February 2019.
Answer:
The first requirement that is relevant to your request is found in section 6B(3)(b) of the Income Tax Act. We copy the relevant part for your convenience:
“The amount of the additional medical expenses tax credit must be … where the person … is a person with a disability, the aggregate of 33,3 per cent of …”
The taxpayer, the person with dementia, is in this instance incurring the expenses.
The fact that the taxpayer is over the age of 65 is really then irrelevant. The tax rebate (section 6B(3)(a) then) is the same for persons over 65 or where the person is someone with a disability (section 6B(3)(b)) – one third of the expenses will be a rebate.
The next issue is that the expenses must be ‘qualifying medical expenses’. This is defined in section 6B(1) of the Act. We copied the part we think may be relevant below:
“qualifying medical expenses” means—
(a) any amounts (other than amounts recoverable by a person or his or her spouse) which were paid by the person during the year of assessment to any duly registered—
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medical practitioner, dentist, optometrist, homeopath, naturopath, osteopath, herbalist, physiotherapist, chiropractor or orthopedist for professional services rendered or medicines supplied to the person or any dependant of the person;
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nursing home or hospital or any duly registered or enrolled nurse, midwife or nursing assistant (or to any nursing agency in respect of the services of such a nurse, midwife or nursing assistant) in respect of the illness or confinement of the person or any dependant of the person;
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pharmacist for medicines supplied on the prescription of any person mentioned in subparagraph (i) for the person or any dependant of the person;”
The costs ‘expense to stay at this special facility’ would then have to fall under item (ii). Put differently, the special care facility must be a ‘nursing home’ and the person must be there because of illness or confinement. The SARS guide doesn’t provide detail on what is meant with confinement.
Remember that a person with a disability, must have been duly diagnosed as such (the ITR-DD form), by a specific medical practitioner (Psychiatrist or clinical psychologist). See the SARS guide – issue 9:
Mental
With the exclusion of intellectual disability, a person is regarded as having a mental disability if that person has been diagnosed (in accordance with accepted diagnostic criteria as prescribed in the Diagnostic and Statistical Manual DSM-5) by a mental health care practitioner who is authorised to make such diagnosis, and such diagnosis indicates a mental impairment that disrupts daily functioning and which moderately or severely interferes or limits the performance of major life activities, such as learning, thinking, communicating and sleeping, amongst others.