“My disability exists not because I use a wheelchair, but because the broader environment isn’t accessible.” – Stella Young, comedian.
When you change your perspective, the way you understand the world around you changes too. Unfortunately, tangible changes to the world around you don’t happen as quickly. Our society’s physical spaces, communication systems, and economy have been very much designed to meet the needs of certain people. If you’re a person whose needs differ, you are frequently reminded of it. Being among the minority, you are left with two options: accept that you are excluded from fully participating in society, or find ways to meet to make an inaccessible world accessible to you.
Given the choice, most of us would undoubtedly choose the latter. But breaking down barriers to accessibility is expensive, and too often people with disabilities are expected to shoulder most or all of this burden.
Thankfully, members of the disability community and their allies have successfully fought to make the world more accessible to more people. Nevertheless, since it’s still significantly more expensive to live with a disability than without one, governments have also implemented programs to help bridge this disparity.
In this blog post, we discuss one such program that may be available to you or a loved ones: the Disability Tax Credit (DTC). While this tax credit won’t put new money in your pocket through a tax refund (with one notable exception), it will help you avoid paying a portion of income tax you may otherwise owe the federal government.
What Is The DTC And Who Is Eligible For It?
In order to offset the costs associated with a physical or mental impairment, the DTC can be applied to an eligible person’s income taxes (or another person if the eligible person is their dependent) to reduce the total tax owing in a year.
Being eligible for the DTC means you may also qualify for other government programs, including: the registered disability savings plan, the Canada workers benefit disability supplement, and the child disability benefit.
You may be eligible for the DTC if you have a condition which affects your ability to:
- Walk
- See
- Hear
- Speak
- Feed and/or dress yourself
- Eliminate your bowels or bladder
If you have conditions which affect mental functions or which necessitate life-sustaining therapy, you may also be eligible.
Qualifying For The DTC
The two-part application process requires the applicant (or their legal representative) to complete Part A, and an appropriate medical provider to complete Part B.
The medical provider must certify that you have either:
- a severe or prolonged disability which entails a “marked restriction,” or “life-sustaining therapy,” or,
- two or more disabilities whose cumulative effects result in “significant limitations” (excluding “life-sustaining therapy”)
A “marked restriction” must:
- create an inability to do an activity or results in it taking three times as long to do the activity than someone of similar age without the impairment, even with appropriate therapy, medication, and using assistive devices
- be present all or almost all of the time (usually at least 90%)
- last or be expected to last for a continuous period of at least 12 months
“Significant limitations” of more than one category of disability must exist together all or almost all of the time (usually at least 90%) and their combined, cumulative effect must both:
- be equivalent to being unable to do an activity in one of the categories, or it taking three times as long than someone of similar age without the impairment
- be present all or virtually all of the time (generally interpreted as 90% or more), even with the use of appropriate therapy, devices, and medication
Medical doctors and nurse practitioners are qualified to certify all of the eligible impairments. Occupational therapists are qualified to certify impairments involving walking, feeding, and dressing. Other specialists can certify individual impairments: audiologist (hearing), optometrist (vision),
Physiotherapist (walking), psychologist (mental functions), speech-language pathologist (speaking). When working with a client, whether they have newly acquired or long-established disabilities, ask if they know about and/or have applied for the DTC. If they are applying for the tax credit for the first time, wait until they have received the expert report used for their civil lawsuit because it tends to support their application.
Provided that all information in the application is complete, the Canada Revenue Agency (CRA) will notify an applicant of its decision within eight weeks of receiving the documentation. If your application is denied, you may call to discuss the decision, request a review, submit new documentation, or file an objection.
Applying The DTC To Tax Returns
Once the CRA approves a DTC application, the person with the disability may apply it when filing their tax return. In cases where the full credit isn’t needed, the balance of the credit can be transferred to the supporting family member listed on the application.
When more than one person supports the dependent who qualifies for the tax credit, it can be split between them provided that they do not claim more than the total value of the claim.
If you’re reading this information and feeling disappointed that you didn’t apply for this tax credit many years ago, I have some good news for you. Qualified applicants can make a claim for up to 10 years of past DTC amounts. If approved, the unclaimed amount of this normally non-refundable tax credit may be refunded by the CRA.
Why Else Should You Apply For The DTC?
As wonderful as it is to get this tax credit, in an article for Policy Options Jill Teeple notes that disability advocates have long complained that its complex and misunderstood eligibility criteria have contributed to dismal uptake.
Teeple suggests that a 2024 report from the CRA’s disability advisory committee, which details its shortcomings and argues for change, means that hope may be on the horizon. But she also explains why the need for change has become critical – namely, the DTC application will be used to qualify people for a new benefit designed to lift people with disabilities out of poverty.
Close to one in five people with disabilities in Canada live in poverty. Among working-age people with intellectual disabilities who live on their own, the number rises to a staggering three in four.
The DTC is a gateway to this new benefit and others, so it is definitely worthwhile to apply for yourself or your loved one if you believe you may be eligible. And, while learning about the DTC and the new Canada Disability Benefit, take some time to explore other potential tax credits and benefits designed to assist members of this community.
Hope Starts Here
Living with a disability in a society that has yet to truly prioritize accessibility can be difficult. People who have only recently acquired their disability may find that adapting is particularly challenging. Perhaps they might even think it’s a hopeless endeavour.
But at Howie, Sacks & Henry, we believe that Hope Starts Here. When you contact a personal injury lawyer at HSH LLP for a free, no obligation initial consultation, you’ll learn that you are not alone in this journey. We are here to help in any way we can.
Whether we are able to connect you to resources to help with your recovery, provide trusted legal advice, or become your tireless advocate as you access the compensation you deserve, at HSH we care about you, your loved ones, and your future.
To learn more about how we can help you, contact us today!
