Q:  My 87-year-old mom lives in a long term care home in Ottawa. I hired a wonderful woman as a companion to her, to supplement my weekly visits. Would her fees be tax deductible as Attendant Care?

A: Possibly, if a few other factors are in play.

Definition of Attendant Care

The Canada Revenue Agency (CRA) defines Attendant Care as “care given by an attendant who does personal tasks which a person cannot do for themselves.” [source]

Definition of Personal Tasks

The next question is: what is a ‘personal task?’ It’s not clearly defined in the document but I found this in one of CRA’s more-detailed tax folios:
1.32 Attendant care is care provided by an attendant who performs those personal tasks which a patient is unable to do for him or herself. Depending on the situation, such tasks could include meal preparation, maid and cleaning services, transportation, and personal services such as banking and shopping. Attendant care would also include providing companionship to a patient. However, if a person is employed as a single service provider, such as a provider of only maid and cleaning services, or a provider of only transportation services, the provision of such service would not be viewed as attendant care. [Emphasis mine.]

Companionship vs Assistance

Note the exception: a ‘single service provider’ doesn’t count. So the issue here is not that companionship doesn’t count as part of attendant care; but that an attendant has provide more than companionship in order to qualify. If she also performs some other task or tasks to help your mom you could make the case.

 

Tax folios like this don’t have the force of law; they’re more like guidance documents to help CRA agents make rulings that are in line with the intention of the tax laws. And reading more closely, it appears that CRA’s intention takes the reverse perspective: not ‘does the companion also assist with tasks,’ but ‘does the person assisting with tasks also provide companionship.’

 

The wording says that providing companionship ‘would’ be included, not ‘must’ be included; nevertheless the intention seems to lean toward companionship being an important part of the relationship (hence it being placed in its own sentence, rather than as part of the list of example tasks), in addition to just providing services. But this is less clear.

CRA seems to be thinking of someone who is primarily a maid and/or primarily an errand-runner; but what brings it past the point of being just a service and into the realm of attendant care is the provision of several tasks, of which companionship might be considered one, or might need to be provided in addition to the help.

Should you try and deduct it?

If you can fit the two-services definition, don’t mind the (slight) possibility of someday having to defend it, and don’t mind the possibility of losing, I’d say go for it.
While you could theoretically make the case that companionship-plus-laundry would count, the intention of the law and the reversal of priorities (laundry-plus-companionship), might matter here. If the woman is providing two services (companionship and something else) and you want to deduct the fees as Attendant Care, be ready to make the argument that she is primarily providing a practical service, and that companionship is part of it (and secondary). Have some kind of documented proof that she does both, and remember to always keep the intention of the tax law in mind.

Some people get very nervous about making a claim that could, in some possible future, be reviewed and need defending. But as a tax person, I just see it as a matter of knowing the rules of engagement with CRA. It comes down to your definition, and tolerance, of risk. I’d say the risk is low, and personally, if the woman does a practical service in addition to providing companionship, I’d try to make the claim and see what happens.

If you do try to take the deduction chances are you’ll be fine, and even if you’re not fine, you’ll be fine – there’s no ‘red flag’ because a person reads the CRA literature and makes a perfectly reasonable call with no intention to defraud, even if CRA disagrees with that call in the end.