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Disability Tax Credit

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What is the Disability Tax Credit?


The Disability Tax Credit is a credit offered by Revenue Canada to those of who have a severe mental or physical impairment which markedly restricts the basic activities of daily living and/or need and dedicate time for Life Sustaining Therapy (Therapy that must occur at least 3 times per week for more than 14 hours per week). They further require that the person eligible have an impairment that has lasted or is expected to last for a period of 12 continuous months. Further Revenue Canada notes "For the purposes of the disability amount, Life Sustaining Therapy is any treatment for a disease or a disorder that, if withheld would prevent the functioning on one or a group of vital organs to sustain human life."

There are some who do not wish to be labelled as "disabled" or have their child carry such a label. I respect that but for myself and others, any financial relief provided by the Federal government is accepted and desired.

 

Who Can Apply?

The Disability Tax Credit is available to those who have a taxable income and who are markedly restricted in the Basic Acts of Daily Living OR require 14 or more hours per week to administer Life Sustaining Therapy.

My child or I have Type 1 Diabetes. Do either of us qualify?

Yes! If you or your child use an intensive insulin management system, you will qualify for the Disability Tax Credit because you require Life Sustaining Therapy.  You require an insulin regime to keep you and/or your child alive.

But what is an Intensive Insulin Management System?

This means that you are taking more than 1 or 2 injections of insulin per day,  you are monitoring your blood glucose levels 6 or more times per day, you are monitoring your carbohydrate income to match your insulin needs, and you are keeping detailed data on trends and patterns for your diabetes care.

I'm on a pump so I automatically qualify right?

WRONG.  As of the 2004 tax year, the method of insulin delivery no longer matters.  What matters is the time you spend on Life Sustaining Therapy.  In previous years, the amount of time spent injecting insulin was the criteria for acceptance.  Insulin pumps inject 24/7.  With the changes, activities must take away from routine daily living.

Please note that if you are using an insulin pump, you can ask to be reassessed for the years 2000-2004 based on pump use.  This will not help you after 2004 BUT you will be given the credit based on the 2000 guidelines for those in between years. Those people who used injections during that time will not qualify. 

 

What if I have no taxable income?

People with low incomes may still find some relief but the credit is designed to assist in reducing your taxable income.  IF you have a child with Type 1 diabetes, there is an added benefit to being approved for the DTC regardless of your income level.  If you are receiving a Child Tax Benefit AND you have a child with Type 1 diabetes, you will be entitled to an added Disabled Child Benefit each month. 

 

But I already filed my taxes for this year. Do I have to wait until next year?

NO.  You can fill out the T2201 at any time.  When you are ready to submit it, you simply request that CRA reassess your taxes for the applicable years (2004 and 2005 for example)

Where do I start?


You will first need to obtain a T2201.  This can be ordered from CRA or found online by clicking on the following link http://www.ccra-adrc.gc.ca/E/pbg/tf/t2201/

This form must then be filled out by the applicant and by an attending physician.  For details on what may be included in this form, please see our Tips section.

The T2201 is sent in with your income tax return. You will fill out your income tax return as if you have ALREADY been approved for the credit and will fill out line 316 (or line 318 to transfer from a  dependent).

 

What do I need to tell my doctor to have the form signed?

 

It is important that physicians understand what they are signing. If you have a child with Type 1 diabetes, make sure that your doctor understands that by signing the T2201, they are certifying ONLY that the child has a diagnosis of Type 1 Diabetes.  They are NOT being asked to specify how much time the child or family spends on diabetes related care.  CRA assumes, based on previous Tax Court cases, that to look after a child (presently defined as someone under 18 years of age) with Type 1 diabetes requires more than 14 hours dedicated to Life Sustaining Therapy on the part of the parent and the child.

For adults and older children, the doctor must understand that they WILL be asked to fill out a supplementary form.  Provide your doctor with as many details of what you do over a week as possible.  They must understand how you spend your time so that they can accurately fill out the supplementary form.  Again, our tips page lists what activities are currently recognized as being part of Life Sustaining Therapy for Type 1 Diabetes. The more information you and your doctor can provide in the original T2201, the less room for error.

Make sure that your doctor indicates that this condition is PERMANENT.  It may effect the amount of time you are given the credit for.

How long will I get the DTC for?


The length of time you qualify for the DTC is subject to CRA's internal policies.  They can grant the credit for one year time frames, and you will have to reapply each year, or they can grant it for specific lengths of time (i.e. 5 years), or they may grant it permanently.  The last scenario is unlikely unless there are other underlying conditions that would warrant it.

When you receive your Notice of Assessment stating that you qualify for the DTC, there should be a further statement of exactly how long you have before you need to reapply.

I received the DTC already as a pumper. Will I be disqualified under the new guidelines?


You will not be disqualified, but you may receive a letter stating that the criteria has changed.  This does NOT mean that you don't qualify. It simply means that you need to reapply under the new rules.  If you were given the credit for 5 years for example, you should not receive any letters but will have to reapply under the new rules when your 5 year period ends.

How do I fill out the form?

Go to the above CRA site and download the form .

On the "Self-Assessment page" check off "yes" to question 3 Do you require life sustaining therapy?

Fill out Part A, page one of the Disability Tax Certificate.

Part B is to be filled out by your doctor. He/she checks off "not applicable" until they reach page 7.

On page 7 the doctor will check off the box "yes" when asked "Does your patient meet the conditions for life sustaining therapy as described above?"

In the section of "year" he/she will put the diagnosis year.

Details would be insulin dependent Type 1 diabetes and then the method of insulin delivery (please remember that method of deliver does NOT change your eligibility for the DTC)

Page 8 is again "not applicable" but page 9 must be filled.

Effects of impairment should not need to be filled in UNLESS you are dealing with a child with developmental issues. This may be a good place to put the fact that despite being over 14 years of age, they are not able to be fully responsible for their own care.

Duration is annoying for those living with diabetes but you must remember that this form is for other diseases/conditions as well. Please note that "yes" the impairment will last for more than 12 months and no there will be no marked improvement thanks to therapy (there will be no cure).

The physician signs off on the form and you submit it with your tax return.

What do I do if I am sent a second form asking about time spent?

 

The easy answer is of course to simply tell them all the time it takes you to fill cartridges, adjust basals, and do all of those things that you have probably forgotten take time out out your day. If you sit for one day and every time you do something because you have diabetes, you will quickly be amazed how time adds up.

 

Here are examples:


For injections: Establish the insulin required based on time of day, caloric intake, activity level and wellness; clean the area with alcohol; make sure alcohol is dried; clean insulin vial with alcohol; remove cap on needle; draw up correct amount of insulin; pinch skin; insert needle; inject insulin; relax hold on skin; place swab over injection site and maintain pressure for a few seconds; replace protective cap on needle; and properly dispose of needle. This takes approximately 6 minutes multiplied by the number of injections per day. For a person who uses a long acting and injects for meals you would count a minimum of 5 needles per day (without corrections) totalling 30 minutes per day, and 210 minutes per week (3.5 hours)

For insulin pumps: Establish the insulin required based on time of day, caloric intake, activity level and wellness (2 minutes six times per day for 84 minutes per week), change pump tubing and insulin cartridge (7.5 minutes every other day totalling 70 minutes per week); adjusting pump programming to accommodate for temporary basal rates, exercise, changing bolus ratios or altering basal rates (10 minutes daily, 70 minutes per week), site change and rotation (10 minutes every other day, 35 minutes per week), emergency site changes due to sites falling out or failing (17.5 minutes twice per week, 35 minutes), establishing correction doses (1 minute twelve times per day, 84 minutes per week), changing pump battery (2 minutes every other week, Logging: I know not everyone logs but reality says that you must look at trends and see if you need adjustments for your exercise routine, pizza supper, or that extra shift at work.  All of these things are tasks that a person with a functioning pancreas would not have to do. This is something you do think about. It would total a minimum of 30 minutes per day, equating to three and a half hours per week.

Analyzing trends and making adjustments: every three days, 20 minutes equals one hour per week Checking meter: this includes coding, using control solution, changing lancet for approximately fifteen minute procedure

Repeating Blood Glucose Test when meter error occurs:  two minutes of your time approximately five times per week (10 minutes)

Treating lows: CDA guidelines state a low is anything under 4. How many lows are normal? This is individual but if you maintain tight control it is more likely to occur. Fourteen lows per week and 5 minutes to treat equals 70 minutes per week.  CRA states in their legislation that recovery time from lows does not count in the calculation of time spent on Life Sustaining Therapy(an extra 15 minutes per low). It has been argued that this is part of therapy and privately they agree but unfortunately there does not seem to be legal precedents backing us at the moment.

Dealing with highs: Again, not to be taken lightly. You need to establish a correction factor. Some people are more insulin resistant at higher bg levels. If you are pumping, you want to check the tubing and the site. If you are on injections you may wish to look at the insulin and the injected area for hypertrophy. You will need to inject to correct and finally you may also need to test for ketones (three minutes every other week, or 1.5 minutes per week). The amount of time this takes would be approximately 6 minutes and as most people tend to run high more times than low. We found 21 highs per week I would say three highs per day totalling 18 minutes per day, or 2 hour 8 minutes per week

Testing: Testing becomes routine but it still must be done. On average one hopes that there is at least 6-12 tests per day. To test you must wash the area to be tested, ensure that the meter is coded properly, insert the test strip, lance the area, apply the blood, record the reading. 8 times per day at 3 minutes per test is 24 minutes per day or 3 hours per week

For people using a CGM:  You would most likely have slightly less testing time (6 times per day or 2.1 hours per week) but will have other tasks that must be added into your calculations such as:
Rotating CGM Sensor sites:  10 minutes once per week
Analyzing your CGM Trends:  30 minutes once per week
Emergency Sensor site changes:  10 minutes every other week or 5 minutes per week.
CGM Calibration:  1 minute four times per day or 28 minutes per week)For a total time spent dealing with the CGMS part of your diabetes care being 73 minutes per week.

So what are the totals?

For someone on injections:
Injecting: 4.5 hours (this includes the time required when you are high and need to calculate a correction dose.)
Logging: 3.5 hour
Analyzing trends and making adjustments: 1.5 hour
Checking meter, coding, changing lancets, etc.: 15 minutes
Testing: 4.5 hours (this included the extra time for retesting during lows)
Total: 14.25 hours per week

For pumpers
:
Dealing with pump: 6.3 hours
Logging: 3.5 hour
Analyzing trends and making adjustments: 1 hour
Checking meter, coding, changing lancets, etc.: 15 minutes
Treating lows: 1 hour 15 minutes (or more)
Dealing with highs: 2 hours 30 minutes
Testing: 4 hours (pumpers usually test closer to the 10-12x per day mark)

Total: 18.8 hours per week
If using a CGM:  add .5 hr.  Time devoted to the CGM part of therapy is approximately 73 minutes but there is usually less time spent testing blood glucose levels which would negate the total or increase it only slightly.

 

Still not sure?


Diabetes Advocacy offers assistance in filling out the T2201.  We will print off the T2201 as well as any requests for reassessment years, fill in the forms and indicate where you and your doctor need to sign, as well as provide you with a detailed letter stating why people with diabetes now qualify for the DTC.  We are not tax accountants but are well versed regarding the Disability Tax Credit and those with diabetes.  Please make sure that your doctor will support your claim.  This fee is for filling out the appropriate forms for you only. We do not guarantee your success but will assist you with any further issues you may have.  

 $140.00 + Xpress post shipping.  Upon receipt of payment, a list of questions will be emailed to you to assist with the completion of your package. Please remember that this fee is for the filling out of the T2201 and accompanying documents. We do not guarentee your success but will assist with further issues.  Please further note that we do not take a percentage of your return. This is a flat fee paid one time per application.


etransferFull payment of $160.00 ($140 for service and $20 for shipping) can be etransferred via your online banking. Please send payments to advocacy @ diabetesadvocacy.com
Security question: service requested.  Answer: DTC 

Any other questions?

Please contact us.

 

DTC History

 

May 2006 Federal Budget:

 

Commitments that directly help Canadians with diabetes

Increased the Child Disability Benefit by $256 a year up to $2,300.

Parents of children with type 1 diabetes may be eligible for this increased benefit which will be effective from July 1st for the 2006 tax Increased the refundable Medical Expenses Supplement to $1,000 effective 2006 tax year which directly benefits working Canadians with diabetes who earn $36,663 or less. http://www.fin.gc.ca/budget06/bp/bpa3ae.htm Explains the Child Tax Benefit for higher income families as proposed in this budget.


February 23, 2005

 

Federal Budget brings in real change for people with Type 1 Diabetes... Minister Goodale announced that his government would accept most of the Technical Advisory Committee on Tax Measures for Persons with Disabilities recommendations listed in the Fair Tax Report of December 2004. He further states that...

"the budget proposes amendments to the Income Tax Act to better define the activities that will be considered therapy and will be included as time spent receiving therapy. Specifically:
 Where the therapy has been determined to require a regular dosage of medication that needs to be adjusted on a daily basis, the activities directly involved in determining the appropriate dosage will be considered part of the therapy. 
 Therapy does not include activities such as following a dietary restriction or regime, exercise, travel time, medical appointments, shopping for medication or recuperation after therapy. 
 The time it takes to administer the therapy must be time dedicated to the therapy—that is, the individual has to take time away from normal, everyday activities in order to receive the therapy. Further, in the case of a child who is unable to perform the activities related to the therapy as a result of his or her age, the time spent by the child’s primary caregivers (i.e. parents) performing and supervising these activities for the child can be considered time dedicated to the therapy. 


With these proposed changes, it is expected that children with very severe cases of 
Type 1 diabetes—who require many insulin injections (which requires knowledge of current blood sugar levels at the time of each injection), as well as several additional blood sugar tests to monitor their condition—will become eligible for the DTC.


The life-sustaining therapy provisions, in and of themselves, do not extend eligibility for the DTC to individuals who receive therapy in a manner that does not significantly affect their everyday activities (for example, by means of a portable or implanted device). These measures will apply for the 2005 and subsequent taxation years."
 

Where do we stand?

 

In the 2005 Budget, Minister Goodale stated that he would accept Recommendation 2.5 made by the Technical Advisory Committee. This recommendation stated that “The federal government ensure that the legislative and administrative requirements concerning the present interpretation regarding life-sustaining therapy adequately reflect the time taken for essential preparation, administration of and necessary recovery from life-sustaining therapy as recently interpreted in decisions of the Tax Court of Canada.”

In his May 6th letter, the Minister himself used this definition of Life-sustaining Therapy as it applies to Type 1 Diabetes when he stated “"where therapy has been determined to require a regular dosage of medication (insulin) that needs to be adjusted on a daily basis, the activities directly involved in determining the appropriate dosage (insulin) will be considered part of therapy."  

The exclusion of the determination of the number of carbohydrates in order to calculate the insulin dosage in the proposed legislation is a restriction that has no medical basis and defies common sense. Calculating carbohydrate intake and calculating the insulin dosages are inextricably tied together. They cannot be separated. One can’t be determined without the other. Any effort to do so can result in death and criminal charges.  

July 1, 2005-The budget legislation passed through the House of Commons, and is now going through the Senate (and its passage should be perfunctory since it is part of a money bill). It then needs to be signed by the Governor General before finally law, however CRA has already started if not finalized it's implementation process internally. They always said they would be ready for September implementation roll-out of the changes, and from our position, it appears they are more or less on track.

There are still a lot of outstanding issues regarding the fair treatment of people with Type 1 diabetes.  We will be keeping on top of the issues and the process. We will work to keep CRA accountable for their actions. Please keep us informed as to what is happening with your case. 

May 19, 2005 saw the second reading of the February 23rd budget pass thanks to the Speaker of the House.  It would appear that we are one step closer to Recommendation 2.5 becoming law.  Recent applicants for the DTC have been told that their claims were "awaiting a Federal decision".  While you can demand to have your claim assessed right away, CRA is awaiting this pending legislation so that it can properly assess the length of time one would qualify for the DTC. IF you have your claim assessed before this legislation is passed, you will most likely have to reapply in the 2005 tax year.  Patience now should mean that you will be given the credit for a longer period of time--for children this should be until they reach the age of majority. 

In the budget released on Wednesday February 23, 2005 the Honourable Minister Ralph Goodale noted that the federal government would accept most of the Recommendations put forward by the Technical Advisory Committee on Tax Measures for Persons with Disabilities.

The budget proposes amendments to the Income Tax Act to better define the activities that will be considered therapy and will be included as time spent receiving therapy. 

Specifically:
Where the therapy has been determined to require a regular dosage of medication that needs to be adjusted on a daily basis, the activities directly involved in determining the appropriate dosage will be considered part of the therapy. 
Therapy does not include activities such as following a dietary restriction or regime, exercise, travel time, medical appointments, shopping for medication or recuperation after therapy. 
The time it takes to administer the therapy must be time dedicated
to the therapy—that is, the individual has to take time away from normal, everyday activities in order to receive the therapy. Further, in the case of a child who is unable to perform the activities related to the therapy as a result of his or her age, the time spent by the child’s primary caregivers (i.e. parents) performing and supervising these activities for the child can be considered time dedicated to the therapy. 
With these proposed changes, it is expected that children with very severe cases of Type 1 diabetes—who require many insulin injections (which requires knowledge of current blood sugar levels at the time of each injection), as well as several additional blood sugar tests to monitor their condition—will become eligible for the DTC.


The life-sustaining therapy provisions, in and of themselves, do not extend eligibility for the DTC to individuals who receive therapy in a manner that does not significantly affect their everyday activities (for example, by means of a portable or implanted device).
These measures will apply for the 2005 and subsequent taxation years.

 

Notice of Means and Ways Motion to Implement Certain Provisions of the Budget Tabled February 23, 2005 

(4) The Act is amended by adding the following after subsection 118.3(1):
(1.1) For the purpose of paragraph 118.3(1)(a.1), in the determining whether therapy is required to be administered at least three times each week for a total duration averaging not less than an average of 14 hours a week, the time spent on administering therapy  
(a) includes only time spent on activities that require the individual to take time away from normal everyday activities in order to receive the therapy,
(b) in the case of therapy that requires a regular dosage of medication that is required to be adjusted on a daily basis, includes (subject to paragraph (d)) time spent on activities that are directly related to the determination of the dosage of the medication,
(c)in the case of a child who is unable to perform the activities related to the administration of the therapy as a result of the child’s age, includes the time, if any, spent by the child’s primary caregivers performing or supervising those activities for the child, and
(d) does not include time spent on activities related to dietary or exercise restrictions or regimes (even if these restrictions or regimes are a factor in determining the daily dosage of medication), travel time, medical appointments, shopping for medication or recuperation after therapy.

This subsection is applicable to tax years 2005 and beyond.  

The Finance Minister has released its proposed amendments to the Income Tax Act. While we assumed that the draft would closely follow the guidelines established by the Technical Advisory Committee, this does not seem to be the case. As noted on www.disabilitytaxcredit.com "In its report, TAC recommended that Life-Sustaining Therapy, in particular for children with juvenile (Type 1) diabetes, includes activities, such as monitoring of blood sugar levels and determining insulin dosages, as indicated in recent Tax Court decisions."

In the proposed legislative amendment, "the time spent on administering therapy includes only time spent on activities that require the individual to take time away from normal everyday activities in order to receive therapy" including the time spent on "activities directly involved in determining the appropriate dosage (of insulin)."

However, the proposed amendment does not include the time required to calculate of number of carbohydrates (which is essential in order to determine the insulin dosage). The time spent on activities related to dietary restrictions is excluded "even if these restrictions or regimes are a factor in determining the daily dosage of medication."

The exclusion of calculating carbohydrates as part of the therapy contradicts the position taken by Minister Ralph Goodale. He acknowledged in a letter dated May 6, 2005 that, "where therapy has been determined to require a regular dosage of medication (insulin) that needs to be adjusted on a daily basis, the activities directly involved in determining the appropriate dosage (insulin) will be considered part of therapy."

Excluding the determination of the number of carbohydrates in order to calculate the insulin dosage is a restriction that has no medical basis. It certainly defies common sense.

Such a restriction has no foundation in law. Indeed, such a restriction makes a mockery out of a number of recent Tax Court decisions as well as the deliberations by TAC.

Calculating carbohydrate intake and calculating the insulin dosages are inextricably tied together. They cannot be separated. One can’t be determined without the other. Any effort to do so can result in death and criminal charges.

According to the Legislative Proposals:

The Act is amended by adding the following after subsection 118.3(1):d) does not include time spent on activities related to dietary or exercise restrictions or regimes (even if these restrictions or regimes are a factor in determining the daily dosage of medication), travel time, medical appointments, shopping for medication or recuperation after therapy." To view the legislation in its entirety go to Minister of Finance Releases of Draft Legislative Proposals Implementing Remaining Budget 2005 Income Tax Measures and follow the applicable link. 

 

Please visit our "Tips" section for further information on applying for the DTC.To read of one family's struggle to obtain the

DTC go to "Our Story". 

 

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