CRA offers a disability tax credit intended to help ease the financial burden for many disabled Canadians by providing some relief for disability costs. The credit is available for individuals who have an impairment that causes a significant restriction in his or her life. (An additional supplement is available if the disability is for a child under the age of 18). This provides a significant non-refundable personal tax credit of $8,113 federally (2017) and $7,656 provincially (2017), which translates to a tax refund in BC of approximately $1,600 (2017). Being eligible for the disability tax credit can also provide access to other federal and provincial programs, such as the registered disability savings plan, the working income tax benefit, and the child disability benefit.
The following criteria are required to claim the disability tax credit. The individual must:
- be a Canadian citizen and
- prove that the disability affects the activities of daily living; and
- have paid federal taxes in the years whilst claiming the credit, or be able to transfer the credit to an individual who has claimed the disabled person as a dependent.
To apply for the disability credit, a prescribed Form T2201 “Disability Tax Credit Certificate” must be submitted to the CRA. Part B of the form must be completed by a medical practitioner.
Depending upon the nature of the disability, the Form can be completed by a medical doctor, optometrist, speech pathologist, audiologist, occupational-or-physio therapist or psychologist.
The practitioner needs to certify that the individual has a severe and prolonged impairment in physical or mental functions, which restrict the activities of daily living for a period of at least 12 months. Eligibility is not based on the impairment itself, but on the severity of the impairment, and on the concept of being ‘markedly restricted’, which means:
- an individual being unable to perform, or taking an inordinate amount of time to perform, the activities of daily living, even with therapeutic assistance, technological/adaptive devices, and/or medication; and
- the restriction affects the individual at least 90% of the time.
The disability tax credit certificate covers the following possible areas of disability:
“Mental functions” refer to:
The practitioner need only certify one of these to enable the credit. In fact, the individual may even qualify under multiple areas. If the “markedly restricted” test is not met, the individual still may qualify under “cumulative effect”, which means “significantly restricted” under at least two of the areas.
The practitioner also must indicate the year in which the disability condition began. This is important to note because, if the disability has existed for one or more previous years, the credit can be claimed retroactively for up to ten years, creating significant back-refunds. There is a tick box on the application which instructs CRA to automatically apply the credit back to all years indicated by the practitioner.
The CRA will review the claim prior to permitting the credit on the personal tax return. Once approved, the credit can be claimed annually in the future as long as the condition(s) do not mitigate. Depending on the condition, the CRA may decide to require an updated assessment some time in the future.
The credit can also be transferred to a spouse or common-law partner if the benefit exceeds the taxes payable for an individual in any given year. In some situations, the unused portion of the credit can also be transferred to anyone who claims the disabled person as a dependent. This could include a parent, child, brother, sister, aunt, uncle, nephew, or niece of the individual. The main consideration here is that the person on whose behalf the claim is being made must be dependent on this taxpayer for support.
We don’t necessarily see all of our clients annually; thus, we may not become aware of developing health conditions. Medical practitioners seldom initiate this matter. So, if you think this credit may be applicable to you or somebody you know, please contact our office as we have processed many claims over the years. Lastly, there may be a psychological aspect to this claim, as individuals may not wish to “recognize” the situation. When a Power of Attorney exists, the Form can be initiated by the legal representative.
Medisys is a national private health care provider, with clinics in Toronto, Montreal, Vancouver, Calgary, Ottawa and Quebec City. It offers a Preventive Health Assessment Program, which involves a half-day appointment. This includes a comprehensive meeting with a lead physician, as well as evaluation for cancer, cardiac risk, vision, hearing and lung function and diet consultation. A comprehensive written report follows. If issues are uncovered, the Team provides referrals to specialists back in the provincial healthcare system. Refreshingly, it is health care…run with business precision! The annual check-up fee qualifies under PHSPs.
Copeman similarly provides annual assessments but also delivers ongoing care programs as a primary care facility, with an entire team of specialized healthcare professionals. Beyond regular GP care, their collaborative approach includes nutrition counselling, exercise medicine and personal training, physiotherapy and mental & cognitive health. They currently have clinics in Calgary, Edmonton, Vancouver and West Vancouver (and imminently in White Rock).
They offer programs including Annual Assessment-only, as well as ongoing year-round relationships. They serve individuals, couples and Families. Similar to Medisys, the fees qualify under PHSPs, and you will experience health care run with business precision… a 9:00 appointment happens at 9:00, not with 1+1/2 hours spent in a waiting room!