Some home care services are exempt from HST. It can save you a bundle.
Paying HST on home care costs? The Community Care Access program is exempt from HST.
When Toronto lawyer Ian McSweeney filed his late mother’s tax return he was pleased to find out that her estate was entitled to a $12,000 HST rebate on homecare services.
But he was less happy to learn from her accountant Lorne Lebow that the health care agency that sent a support worker to care for her shouldn’t have billed her for HST in the first place.
McSweeney’s mother lived in Toronto’s Hazelton Place Retirement Residence from 2008 until shortly before her death in 2013. She eventually needed more care than Hazelton alone could offer, so the family applied to the Ontario government-funded Comunity Care Access Centre (CCAC) for additional subsidized one-on-one care at the retirement facility
The program provided two hours a day of care each morning. But the family also paid for more care through a private agency for another eight to 10 hours a day so she could stay at Hazelton instead of moving to a nursing home, says McSweeney.
The Community Care Access program is exempt from HST. But Lebow, a partner with the Toronto accounting firm of Stern Cohen LLP says most people don’t realize that when they are able to access some CCAC services and they also buy additional private services, they don’t have to pay HST on the private services.
McSweeney says the agency supplying the extra help didn’t ask if his mother was also receiving Community care Access care or say if she was, they did not have to charge HST. They should.
Sheldon Crystal, the executive director of Qualicare Family Health Care in Vaughan, says his staff are instructed to always ask if there is CCAC involvement in situations like this to avoid billing with HST.
Crystal also says that if his agency learns at a later date the client is receiving CCAC, the HST is directly refunded to them. “We do not expect our customers to apply to CRA for a rebate.”
Lebow recommends that in any situation where an individual requires home care services, an application should be made to CCAC or a similar government agency for subsidized or free services before or at the same time a private home care worker is retained.
“Even if CCAC authorizes services for only one or two hours a week, it’s enough to trigger the HST exemption for additional privately-retained home care services. With an HST rate of 13 per cent that can quickly add up,” Lebow says.
He also advises individuals receiving both public and private home care services to inform the agency they are working with and request that invoices do not include HST.
In the event that someone you know has inadvertently paid HST you can apply to the CRA for a rebate going back two years.
Ontario residents must send the completed General Application for rebate of GST/HST CRA (Form 189) three-page form with a letter from CCAC confirming the client is receiving subsidized care plus copies of the original invoices to the Sudbury Tax Centre 1050 Notre Dame Ave., Sudbury, ON, P3A 5C1.
“A rebate can take up to several months to process,” Lebow says.