By Cynthia Minh
As we continue to feel the impacts of COVID-19, we see how health can significantly impact financial well-being, and just how social circumstances can deeply impact health outcomes. Simply put, providing better access to government benefits can go a long way to improving quality of life.
In this article, we discuss how the Disability Tax Credit (DTC) can offer financial support to individuals and families, and how health professionals play a key role in helping their patients apply.
What is the Disability Tax Credit (DTC)?
The DTC is a non-refundable tax credit that reduces the amount of taxes individuals or their caregivers owe. Designed to help defray higher costs associated with disability, over the years, many new legislation and changes in policy have connected the DTC to additional benefits—including the Child Disability Benefit and Canada Worker’s Benefit—that can help support even those without a taxable income.
Perhaps the most significant benefit that DTC holders can access is the ability to open a Registered Disability Savings Plan (RDSP)—a long-term savings plan designed to help them save for their future. A little known fact is that those with lower income who may not benefit from a tax credit could still find the RDSP worthwhile. Those under 49 can access up to $90,000 in government grants and bonds.
Most recently, as part of its COVID-19 relief plan, the federal government announced that it will provide a one-time payment of up to $600 to people with disabilities who have the DTC or other federal disability supports.
The $600 payment makes clear that the DTC, one of the primary ways the federal government recognizes disabled populations in Canada, has instilled a sense of urgency in people who were previously unaware of the DTC. Many who need the payment can still access it if they apply for the DTC by December 31. The DTC remains a principal federal disability support that allows people to access other significant benefits.
Who is eligible for the DTC?
Unlike other disability benefits, patients do not have to be considered totally disabled to qualify for the DTC. Eligibility does not depend on income and does not have age restrictions. Patients with severe physical or mental health conditions that have lasted or are expected to last at least a year would qualify for the DTC.
If your client experiences restrictions in vision, speaking, hearing, walking, feeding, dressing, eating or preparing food, toileting, or mental functioning, they should consider applying. Your patient can either be very restricted in one category, or somewhat restricted in two or more categories. Patients can also qualify if they require life-sustaining therapy at least three times a week, for 14 hours a week.
How can I help my client apply?
Applicants must fill out the Disability Tax Credit Certificate (form T2201). Medical practitioners can help their patients by filling out Part B of the application form.
While physicians and nurse practitioners are the only health professionals able to certify all sections of the form, specialists can also help certify specific categories. Psychologists, for example, can help clients with restrictions in mental functioning; occupational therapists are able to help clients with restrictions walking, dressing, and feeding.
If patients qualify under multiple restrictions, specialized health professionals that have more specific insight into a patient’s daily functioning can forward relevant medical information to general practitioners to help with the application.
• Eligibility is not based on diagnosis but on functionality. Speak to your client about the effects of the disabling condition(s) on their everyday life and daily functionality. Compare this functioning to an average person of the same age. Be specific.
• If your client is experiencing restrictions in mental functioning pay specific attention to areas of self-care, simple transactions (e.g. grocery shopping), appropriate social interactions, appropriate decision-making and judgment, memory and concentration.
• Do not include the client’s ability to work, perform academically, housekeep, manage a bank account, drive or engage in recreational activities. These activities are not considered relevant to DTC eligibility.
In these unprecedented times, what is made clear is the disproportionate impacts of health and poverty on vulnerable communities, and a need for poverty reduction interventions within health care practices.
• www.canada.ca: Guide RC4064 Disability-Related Information
• www.canada.ca: Tax credits and deductions for persons with disabilities
• A dedicated CRA line for health care providers is available to discuss the DTC program, application criteria and the Income Tax Act. Call 1-800-280-2639.v Cynthia Minh is the Program Manager of the Access RDSP Program at Disability Alliance BC—a cross-disability non-profit organization based in British Columbia.
Cynthia Minh is the Program Manager of the Access RDSP Program at Disability Alliance BC—a cross-disability non-profit organization based in British Columbia.
Access RDSP is a partnership between DABC, BCANDS, and Plan Institute,that provides support to Canadians wanting to open an RDSP. Free supports and services for hysicians and patients are available including, Disability Tax Credit Support, assistance to open an RDSP, specialized support and navigation for Indigenous peoples, RDSP & DTC info sessions for individuals, organizations and health professionals, $150 grant for low-income BC residents. Call toll-free: 1-844-311-7526, email: email@example.com or visit www.rdsp.com.