The Disability Tax Credit - Do You Qualify?
It is important to Canadians to take care of those who are most vulnerable in our society. In fact, our country has recently been named one of the most socially progressive nations on the planet (second only to Finland in this ranking according this National Post story.) However, despite their being a number of programs to soften the financial blow of living with a disability, the Canadian Revenue Agency (CRA) has revealed that a little less than half of the Canadians, whom the agency knows are disabled, access tax credits for which they are eligible. A CBC story indicates the CRA is aware of 1.1 million Canadians who qualify for this tax credit but reveal only 620,000 disabled people actually applied for it (reporting year 2013)
WHO is eligible?
From a CRA perspective, the only way to receive a Disability Tax Credit is if the Agency approves a form called T2201 which you can view here. This form must be filled out by a medical practitioner who has to describe the physical or mental challenges facing their client. The qualified patients’ impairment must be prolonged (lasting at least a full year), and be severe enough to restrict elements of daily living, a minimum of 90% of the time.
It is important to underline that the CRA does not “consider an individual’s ability to work” when determining eligibility for the DTC.
WHAT is the amount of the tax credit?
The amount of federal and provincial tax relief disabled people will receive in the 2016 tax year will be up to a maximum of 2,589.85. This works out to a little more than $215/month. This may seem like a modest amount but is nothing to sneeze at. Additionally, if the disabled person does not earn enough to pay income tax, the credit can be transferred from a spouse or dependant.
WHERE else can someone apply to receive disability benefits?
If you qualify for the DTC, it is likely there are other programs offered by other government agencies at the various levels including these three programs:
WHEN does a person become disabled enough to be eligible?
This is a difficult question to answer as there can be a certain amount of subjectivity to each individual situation. One method of making this determination is by answering the questionnaire the CRA thoughtfully provides on their website which can help to establish whether you fit their criteria. http://www.cra-arc.gc.ca/tx/ndvdls/sgmnts/dsblts/dtc/qstns/q1-eng.html
WHY do so many disabled people fail to apply for this benefit?
The reasons that eligible people do not apply for the Disabled Tax Credit are many but largely fall into a few basic categories.
- They, or the loved ones caring for them, are unaware the tax credit is even offered.
- They believe the documentation is too confusing.
- They don’t feel comfortable asking their doctor to fill out Part B of the T2201 form.
- They can’t afford to pay for the administration fee from the doctor (The amount Alberta doctors charge for this uninsured service varies according to this price list which it says was “established by the Alberta Medical Association” . I checked with my own doctor and was advised the minimum charge for most medical forms, including this one, is $50. They indicated the amount is fairly standard among Alberta physicians.
- They don’t think they are disabled enough to qualify.
- Many disabled people don’t make enough income for a tax credit to be of any value since the unemployment rate for those with serious disabilities is many times higher than their able-bodied counterparts.
The CRA website is a source for more information regarding the Disability Tax Credit, or if you have specific tax questions regarding your own specific circumstance, please contact a CRA, CA such as myself.