The CRA makes it so hard to get the disability tax credit, many don’t even try
Only 40 per cent of the more than 1.8 million people who live with severe disability in Canada use the federal disability tax credit (DTC). And the mind-numbing rules devised by the Canada Revenue Agency to assess eligibility for the credit are likely one of the main reasons for such poor uptake.
That’s the conclusion of a recent review of the credit by the University of Calgary’s School of Public Policy, which also cites low awareness of the credit and limited understanding of its potential benefits as possible causes for low participation rates.
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Canadians with disabilities have to pay a physician or other qualified health professional to certify that they require “life-sustaining therapy” administered at least three times a week, for a total of at least 14 hours a week. Alternatively, doctors and nurses must attest that patients are “markedly restricted in performing a basic activity of daily living all or substantially all of the time, or that the cumulative effect of restrictions across several activities is equal to being markedly restricted in one basic activity of daily living,” write authors Stephanie Dunn and Jennifer Zwicker.
If that made your head spin, you’re not alone. Even doctors often can’t make heads or tails of it, the report suggests. In fact, some health professionals are refusing to fill out the forms, particularly for mental health patients, for which the criteria for eligibility are even stricter, the study says referencing recent media reports.
Doctors who do take a stab at completing the forms have different interpretations of what the guidelines mean, which may result in some eligible patients wrongly being denied access to the credit, the report continues.
And even when physicians fill out applications certifying the eligibility of their patients, they may receive puzzling or inconsistent feedback from the Canada Revenue Agency (CRA).
Prior research has also raised concerns about “inconsistencies in how applications are reviewed, whether those reviewing applications are qualified to do so, opaque internal review, reconsideration and appeals processes, and the withholding of documentary evidence by the CRA during appeals processes,” write Dunn and Zwicker.
But the ordeal doesn’t necessarily end there. In many cases, even Canadians who are officially deemed eligible for the DTC must reapply for it after a period of time, even if their disability is a severe and lifelong condition.
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Check-the-box format doesn’t fit the reality of disability
The CRA’s check-the-box approach to assessing disability isn’t working on a number of levels, the report suggests.
For example, CRA guidelines require that impairment due to mental illness be present continuously for 90 per cent of the time.
But this doesn’t fit with the nature of mental health disabilities, which are often “temporary, episodic and changing in nature, with symptoms varying in severity and duration over the course of peoples’ lives,” the Schizophrenia Society of Ontario wrote in a 2014 submission to the CRA.
Another perplexing outcome is the CRA’s recent move to deny the DTC to many Canadians with diabetes on the basis that time spent receiving therapy from a portable insulin pump or counting carbohydrates, which is essential for calculating insulin dosage, doesn’t count as life-sustaining therapy.
Global News reporting into the diabetes controversy found that one possible reason for the higher reported DTC denials is the fact that the CRA at some point (it’s unclear when), stopped relying on input from registered nurses in the approval process, meaning that a medical professional isn’t necessarily involved in reviewing the applications anymore once they reach the CRA.
Opaque and inconsistent feedback
Sometimes, filing a DTC application can feel like dropping a bunch of paperwork into a black hole.
Rachel Martens, a full-time caregiver in Calgary, has had two radically different experiences with the tax credit. Her now 11-year old son, who suffers from a rare chromosome disorder, was swiftly approved about a decade ago. But Martens’ sister, who has been diagnosed with a chronic pain disorder called trigeminal neuralgia, is still waiting on a CRA assessment two years after submitting her application in 2015.
So far, Martens, who acts as her sister’s caregiver, has only received one letter from the CRA about a year ago advising that her sibling’s case needed further examination.
It’s been silence ever since, and Martens said she has not been able to get further assistance over the phone.
“It’s been intensely frustrating,” she told Global News.
Both suffer from rare conditions associated with high mortality rates, she said, adding that she felt “frustrated over a lack of standard.”
The Liberal government’s recent reinstatement of the Disability Advisory Committee (DAC), which will bring together stakeholders and CRA officials, is a “promising step” toward improving accessibility to the DTC, write Dunn and Zwicker. But the system needs a much broader shake up.
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DTC is key to receiving other disability benefits
The DTC itself is a non-refundable tax credit that lowers or eliminates the tax bill for Canadians living with disability and their caregivers, who often struggle with both higher living expenses and lower income.
But being approved for the DTC is also a precondition for accessing a number of others — often more financially significant — benefits, the University of Calgary study notes. Among them are the Child Disability Benefit and government contributions to the Registered Disability Savings Plans.
Overall, the DTC and linked benefits are worth up to $12,000 a year for a median-income family and $7,600 for an adult with a severe disability making $45,000 in annual income, the authors calculate.
Essentially, said Martens, the “DTC is the gateway to everything.”
That it can be so elusive to gain eligibility is “an intimidation factor” for families, she added.
– With a file from Global News National Online Journalist Monique Scotti
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