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Three tax benefits for families with someone in long-term care

Three tax benefits for families with someone in long-term care

Next in our series of tax-time blogs, we are outlining the benefits you may be  entitled to if you have a family member living in long-term care.

1. Claim Involuntary Separation for your Guaranteed Income Supplement

If you are receiving the  Guaranteed Income Supplement (GIS) and have a spouse residing in long-term care, you may apply as single individuals rather than as a couple, allowing both persons to be eligible for the GIS.

Each person needs to apply separately for the GIS. In the application form (section c), indicate your marital status as “ separated “and note “involuntary” on the right-hand portion of the application. For the remainder of the application form, provide the required information for yourself.

2. Long-term care home expenses may be claimed as a medical expenses

The costs associated with a long-term care home may be claimed as a medical expense on your tax return and reduce taxes otherwise payable. You may claim  the expenses on behalf of your spouse or a dependant (a dependant is defined as relative with a mental or physical disability who depends on you for financial support).  You may claim only amounts exceeding the lesser of 3% of the dependent’s net income and $2,152.There is no limit on the amount you may claim.

The amount is calculated by adding the total of the allowable medical expenses minus the lesser of $2,152 or 3% of net income.  Amounts above this threshold will be subject to a 15% federal credit.

If you claim as a medical expense all costs associated with a long-term care home, you will not be eligible for the disability amount tax credit.  Depending upon your tax situation, you may wish to consider claiming the disability amount tax credit and then for medical expenses claiming the allowable portion of amounts paid relating only to salaries and wages for attendant care expenses.

3.Ontario Trillium Benefit and Ontario Seniors Property Tax Grant

You may qualify for several tax credits that are designed to help Ontarians pay for energy costs, sales taxes and property taxes. If your spouse is a resident in  a long-term care facility, you may claim ‘involuntary separation’ and each apply for the benefit as separate individuals.

Subject to income levels, the benefits could amount to approximately $2,000 per individual if you incur  property taxes, heating costs and sales taxes  The amount of the benefit for the spouse living in long-term care will depend whether the institution is private or public.

Please be sure to consult with a qualified tax professional when determining your eligibility for these tax benefits.

Learn more about the disability tax credit and tax credits for caregivers.

What you didn’t know about the disability tax credit

What you didn’t know about the disability tax credit

It’s tax time again! This is the first in a series of blogs giving you easy-to-understand information about tax issues for Canadians. All information has been vetted by a Chartered Accountant. If you are looking for a general overview, read our post on tax benefits for people with dementia.

The disability tax credit is an often-overlooked credit that all people with dementia should be receiving. Here’s a basic outline of how it works:

  • To be eligible for this credit, you must submit the T2201 form to Canada Revenue Agency. A medical professional, usually a doctor, must certify the form.
  • The credit is worth just under $8,000 on paper, giving it a value of $1,500 or more in real money depending on the province in which you live.
  • The credit is non-refundable, meaning that once your income tax  is zero, you cannot receive any more money from it that year.
  • However, the credit can be transferred to a spouse or another family member who is considered a supporting individual. So if your tax is zero, your caregiver or family member may be able to receive any unused tax benefits.


But perhaps the most overlooked and crucial detail of this credit is that it may be claimed retroactively, up to as many as 10 years.  That can add up to a major tax refund if your doctor determines that the prolonged impairment started in an earlier year. For example, if your family member had symptoms that fit the CRA’s requirements in 2010, you may be able to recover up to $1,500 from each year based on taxes paid in each of the prior years.

It’s possible that you were eligible for the tax credit before a diagnosis of Alzheimer’s disease was made if  your family member  was already experiencing the symptoms that fit the requirements. That is, the person must have one or more severe and prolonged impairment in physical or mental functions that cause a “markedly restricted ability to perform a basic activity of daily living.” A basic activity of daily living is defined as:

  • Mental functions such as memory, problem solving, judgement and functioning in an environment
  • Feeding or dressing oneself
  • The ability to communicate in a quiet setting with the affected individual (both speaking and listening skills)


So you are eligible to apply for the for tax credit whenever you feel that your family member has met one or more of these requirements. The form T2201 Disability Tax Credit Certificate, has two parts. Part A is completed by you and Part B by your doctor. The form must either be filed before the filing of your income tax return for the year or with your return .You will be eligible for the Disability Tax Credit only if Canada Revenue Agency approves this form and advises you in writing

To request any credit from previous years, you also need to prepare  a T1-ADJ T1 Adjustment Request for each year you were entitled to the benefit.

Please note: The rules for the disability tax credit and transfers of unused credits are complex, so please consult with a qualified tax professional when seeking to claim any current or retroactive benefits.

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New tax credit for safer homes

New tax credit for safer homes

Have you heard about the Government of Ontario’s Healthy Homes Renovation Tax Credit?

If you are over the age of 65 or live with someone who is senior, you could make your home safer and more accessible and the Ontario government will cover 15% of the costs. Up to $10,000 in renovations can be claimed.

At the Alzheimer Society, we understand that people with dementia, like other seniors, prefer to stay at home for as long as possible. Home can help preserve a sense of self and each year the move to a long-term care home is delayed saves $50,000 in health-care costs.

But home can also be a dangerous place for someone with dementia. The disease affects physical abilities as well as memory, judgment and insight. Here’s a list of upgrades that will make home safer for someone with dementia and also be covered by the tax credit:

•     Grab bars around the toilet, tub and shower

•     A raised toilet seat

•     Non-slip flooring in the bathroom

•     Handrails in corridors

•     Wheelchair ramps, stair/wheelchair lifts and elevators

•     Additional light fixtures throughout the home to make light levels are adequate throughout

•     Improving outside steps

Before beginning any renovation, make sure it qualifies by calling 1-866-ONT-TAXS (668-8297).To learn more about the tax credit, visit the Government of Ontario’s website.