There are many "hidden" health costs that qualify for tax deductions.Getty Images/iStockphoto
We Canadians like to take pride in our publicly funded health-care system, but the truth is many of us pay out of pocket for a wide range of essential health services. This is especially true for those with, or caring for, someone with disabilities or chronic conditions. Studies show Canadians pay as much as 30 per cent of our health needs privately.
Health costs that most Canadians bear privately include prescription glasses, dental care and most medications, because these are not included in the Canada Health Act, which guarantees essential physician and hospital services only.
But those are just the obvious out-of-pocket health costs – there are many "hidden" health costs, too, related to specific therapies, medical devices or social and educational services and supports.
Thankfully, many of these are permitted medical expenses under the Canada Revenue Agency and qualify for the medical tax credit. A few eligible expenses might even surprise you.
1. Travel. If you or your dependent travelled more than 40 kilometres from home for medical services, and the equivalent services were not available near you, you may be able to deduct these costs – even for costs incurred outside of Canada.
2. Training and respite. If you need to learn how to care for a dependent with a physical or mental impairment, training costs for you or a relative are eligible.
3. School and tutoring. All personnel, equipment and facility costs associated with a school for those with a physical or mental impairment are deductible.
4. Talking textbooks, reading services, symbol boards. A student with a perceptual disability in secondary school may be eligible to have their talking textbooks included as medical expenses, as are reading services for those who are blind or have a severe learning disability.
5. Service animals. The cost of a specially trained animal to help someone who is blind, deaf, has severe and prolonged physical impairment, has autism, epilepsy or diabetes may be eligible – but only from recognized providers. This includes the cost of the animal and their care and maintenance, such as food and veterinarian care.
6. Therapy and therapy plan. The costs associated with creating a personal therapy plan and the costs of therapy for someone with a mental or physical impairment are eligible expenses. This includes services provided by a psychologist or occupational therapist, for example.
7. Diapers. Diapers or disposable briefs for someone who is incontinent can be included.
8. Medical marijuana. You have to be authorized to use marijuana for medical purposes, and purchase it from a designated producer, but it's eligible.
9. Gluten-free products. The difference in cost between non-gluten-free products and gluten-free products is tax deductible – but only if you have celiac disease.
10. Construction and renovation. Some construction costs to renovate your home are covered for those with severe and prolonged mobility impairment. Examples include costs for building ramps, enlarging halls or lowering cabinets, as well as driveway access.
Other home-related eligible expenses could include the costs associated with an electric or sealed combustion furnace, air filter, cleaner or purifier and air conditioner.
Unfortunately, there's one major cost that's not covered: Over-the-counter medications, vitamins or supplements, even if prescribed by a doctor (except vitamin B12 for pernicious anemia).
You can see the full list of eligible medical expenses on the CRA site in a new easy-to-read guide. But beware: Most of the eligible expenses listed above require a prescription and/or certification in writing from a medical practitioner before they can be eligible and some are only deductible for specific conditions. And, keep your receipts, of course.
A few medical expenses also require eligibility first under the Disability Tax Credit (DTC). The DTC is something you have to apply for before you do your taxes. It functions as a credit, reducing the amount of income tax you may have to pay regardless of out-of-pocket medical expenses.
The DTC is overdue for an overhaul – it's complex, bureaucratic and fewer than half of Canadians who are eligible for it bother to claim it, which is a shame. But the DTC tax relief can be substantial, with other possible benefits such as eligibility for the registered disability savings plan and other provincial credits kicking in, so it's well worth looking into for those with or caring for someone with a long-term disability or chronic condition.
Kathleen O'Grady is the managing editor of EvidenceNetwork.ca and a Research Associate at the Simone de Beauvoir Institute, Concordia University, Montreal. You can follow her on Twitter @kathleenogrady.