Takeaways from the Senate Committee Report on DTC

This article was originally created for insulinpumps.ca and published on June 19, 2019

Some background

senate review

During the summer of 2017, many Canadian diabetes groups were made aware of an increased number of rejected applications for the Disability Tax Credit (DTC) by people living with diabetes. A public letter was sent to both the media and finance department asking why the Canada Revenue Agency seemed to be implementing a policy change when there had been no change in legislation.

By December of 2017, the Senate Committee on Social Affairs, Science and Technology convened to discuss this issue. They met with various groups in February of 2018.

What the committee was told

The committee heard from a variety of groups and individuals including key players from the Juvenile Diabetes Research Foundation (JDRF) and Diabetes Canada. They were told that both the DTC and the (Registered Disability Savings Plan)RDSP are underutilized despite the potential to offer great assistance to qualifying individuals. The current DTC is only of financial benefit to those who have an income because it is a non-refundable tax credit. Individuals with little or no income are not applying and therefore are not eligible for any further assistance in the form of grants available from the RDSP.

They were told that currently the CRA (Canada Revenue Agency) employees are being given the power to overrule the certification of a medical doctor. This suggests that the employees somehow have greater knowledge of a person’s medical condition and restrictions than that of a physician.

JDRF and Diabetes Canada also requested that the 14 hour minimum for life sustaining therapy be removed. They noted that similar health burdens and financial challenges occur for all people with type one diabetes regardless of the time spent. They all require the same activity restrictions and higher costs associated with administering insulin regardless of whether it takes 10 hours or 14 hours per week.

It was further noted that “these rules can often mean that young adults cease to qualify for the DTC when they turn 18 simply because their parent’s time is no longer included in the amount of time spent administering a therapy. In reality the only thing that has changed is that the person has turned 18. “

Finally, the committee was advised that people with life-long conditions, like diabetes, are being forced to reapply for the disability tax credit. This is a waste of time and resources.

The Recommendations:

On June 27th, 2018 the Senate Committee on Social Affairs, Science and Technology released its recommendation on the Disability Tax Credit and the Registered Disability Savings Program. These are the ones that apply to people living with diabetes.

  • implement legislation that would limit the fees disability services providers can charge to complete the Disability Tax Credit application (this has been tabled but not brought into force yet)
  • Re-examine the arbitrary 14 hours required for life sustaining therapy
  • Eliminate the need to reapply for life long conditions
  • Improved transparency for those who have to appeal their DTC denial
  • Allow people to keep all contributions made to their Registered Disability Savings Plans for periods in which they qualified for the Disability Tax Credit.
  • Work with all levels of government to ensure that all people with qualifying disabilities over the age of 18 can access the Registered Disability Savings Plan program.
  • Change the 10 year wait to access RDSP funds and grants
  • Make this a refundable credit so that it also helps those with lower or no incomes
Senate committee recommendations

Everything you need to know about RDSPs

RDSP

If you have successfully applied for the Disability Tax Credit, the savings do not end with your tax return. You are also eligible for FREE money from the government! I know that sounds too good to be true! That is why I asked Jane Buchanan, District Leader, Representative of Primerica Financial Services, to explain exactly how easy it is to get FREE money with a Registered Disability Savings Plan!

What is the Registered Disability Savings Plans (RDSPs)?

People with disabilities and their loved ones face a distinct set of financial challenges throughout their lives. To help address these challenges, the Government of Canada introduced the Registered Disability Savings Plan (RDSP) in 2008. Designed to help build long-term financial security for disabled persons, the RDSP makes it easier to accumulate funds by providing assisted savings and tax-deferred investment growth.

 Who is eligible for an RDSP?

To qualify for an RDSP a beneficiary must:• Be eligible for the Disability Tax Credit

• Be a resident of Canada

• Be less than 60 years of age

• Have a valid Social Insurance Number

The Disability Tax Credit is available to individuals who have mental or physical impairments that markedly restrict their ability to perform one or more of the basic activities of living, such as speaking, hearing or walking. The credit is also available to those who spend more than 14 hours per week on life-sustaining therapy.

The impairment must be expected to last longer than one year, and a physician must certify the extent of the disability. There can only be one RDSP account per beneficiary, and only one beneficiary per plan.

Click here to see if you might qualify.

What are the key benefits of an RDSP?

RDSP
  • Money contributed grows tax free.
  • Anyone can contribute to an RDSP with the written consent of the account holder.
  • Contributions can be matched, based on family income, with up to $3,500 a year in Canada Disability Savings Grants (CDSG) and up to $1,000 a year in Canada Disability Savings Bonds (CDSB).
  • Carry forward on CDSG and CDSB is available back 10 years or to date of diagnosis.
  • The total lifetime contribution for each beneficiary is $200,000, with no annual contribution limits.
  • If a parent or grandparent passes away and has a financially dependent child or grandchild, they can transfer up to $200,000 of their RRSP/RRIF or RPP to the dependent’s RDSP on a tax-deferred basis.

Who can qualify to be the beneficiary of an RDSP?

To qualify to be the beneficiary of an RDSP, an individual must:

  • Be eligible for the Disability Tax Credit
  • Be a resident of Canada
  • Be less than 60 years of age
  • Have a valid Social Insurance Number (SIN)

How do you maximize your savings?

  • Start saving early. Make it automatic by enrolling in a pre-authorized chequing program.
  • Take advantage of government grants and bonds and contribute every year to get the maximum annual Canada Disability Savings Grant and Canada Disability Savings Bond.
  • Plan withdrawals to avoid federal grant and bond repayments.

What is the Canada Disability Savings Grant (CDSG) and the Canada Disability Savings Bond (CDSB)?

The Canada Disability Savings Grant (CDSG) and the Canada Disability Savings Bond (CDSB) are federal programs that provide payments to RDSPs to encourage long-term savings through an RDSP.

Grants and bonds are available to beneficiaries up until December 31st in the year they reach age 49. Contributions can be matched, based on family income, with up to $70,000 in Canada Disability Savings Grants and up to $20,000 in Canada Disability Savings Bonds.

RDSP with drawls are also known as disability assistance payments. There are two types of payments from an RDSP lifetime disability assistance payments and disability assistance payments.

How do you contribute to an RDSP?

 Once a Registered Disability Savings Plan is set up there are five ways to put money in:

  1. contributions by the account holder.
  2. contributions by people the account holder has authorized.
  3. federal grants and bonds.
  4. transfers from a qualified or RRSP, RRIF or RPP.
  5. transfers of the accumulated income from a registered education savings plan on which the beneficiary is on both RESP and RDSP.

How do to get money out of an RDSP?

RDSP withdrawls are known as disability assistance payments. There are two types of payments from a RDSP. 

Lifetime disability assistance payments are recurring annual payments that one started must be paid until the plan is terminated where the beneficiary has died. These may begin at any age that must start by the end of the year in which the beneficiary turns 60. 

The other type of payments are disability assistance payments which are lump sum payments made to the beneficiary or the beneficiary’s estate.

When withdrawing funds from a Registered Disability Savings Plan, it is important to be aware of the 10-year rule. If a person withdraws amounts that were contributed in the ten-year period prior, grants and the bonds from the government must be repaid to them. The repayment is three dollars for every one dollar withdrawn (aka the Holdback amount).

The purpose of the holdback amount is to ensure that RDSPs are used for long-term savings, and it also ensures the government funds contributed are not withdrawn and used otherwise.

Have more questions?

Contact Jane Buchanan, District Leader, Representative of Primerica Financial Services Call: (506) 863-4425 Email: [email protected]

To see if you might qualify for the Disability Tax Credit, try our short quiz. If you have been putting off filling out your application form, get our easy to follow step-by-step guidebook.

Disability Tax Credit…What now?

Disability Tax Credit next steps for people with diabetes

Last week, CRA decided to reverse its policy on adults living with Type 1 diabetes and the Disability Tax Credit. This probably has many people wondering..what now?? Here are a few next steps for adults living with type 1.

If you were rejected after May of 201 you haven’t applied yet but want to

For those who haven’t yet filled out an application, you can now do so with some confidence in approval. If you live with type 1 diabetes and are intensively managing your diabetes, then you could qualify. 

Take the Disability Tax Credit Quiz here.

As per before May 2017, you will have to show the time you spent.  That time will have to be more than 14 hours per week.  It cannot include time spent on exercise, carb counting or recovering from a low.

See how much time you do spend on allowable tasks using our workbook.

Follow the Disability Advisory’s Committee’s actions and calls for action.

The Disability Advisory Committee is made up of professionals and advocates.  They will be working to see the DTC fairly applied to all qualifying individuals.

If you are interested in seeing the credit properly reflect the needs of Canadians and more specifically, Canadians with type 1 diabetes, I would suggest that you follow the activities of this committee. They will be looking for submissions and information from Canadians.  Send in your letters and continue to help them inform Ottawa of why people with diabetes who intensively manage their diabetes qualify for this credit.

Read the Senate Committee’s Recommedations here.

Keep the pressure on your MPs.

Make sure that your MP understands that the Liberal government’s recent actions surrounding the Disability Tax Credit are not acceptable.  Let them know that we do not appreciate being lied to.  Ensure that they understand what is involved in diabetes care on a daily basis.  Work to educate them on how people with type 1 diabetes spend over 14 hours on life sustaining therapy.

If you have any more questions or would like someone to review your application before submitting it to CRA for approval, I am always just an email away!

If you are unsure how to fill out your Disability Tax Credit application, our eBook will guide you through the process.

The DTC…We have come a long way. We will win the war!

we will win dtc warThe past few weeks have been incredibly busy and I have never been more proud! I have been battling the Federal government over the Disability Tax Credit since the early 2000s.  There have been victories and most recently there have been setbacks but we have come a long way!!

Let me give you a bit of history.

Back in 2002 or so, a lady named Shelley Tyler took the Canada Revenue Agency to court and won.  She believed that her son was eligible for the Disability Tax Credit because they took an inordinate amount of time to feed him and keep him alive.  Her son had type 1 diabetes.

Mrs. Tyler was kind and shared her experience with others.  I used some of her work in preparing my own application.  Others did as well.

More and more families were applying for the Disability Tax Credit.  They were still being turned down, but even more where refusing to take no for an answer.  They were taking their cases to Tax Court–and winning!

Families like the Chafes were winning the argument that insulin therapy was administered 24 hours a day when using an insulin pump.  This led to a year of qualification for all pumpers.

(The irony of recent comments that the increased use of insulin pump therapy is why applications have been denied is not lost on me. )

Changes were happening.  The diabetes community was roaring.  We were a grassroots group.  The Canadian Diabetes Association was only in the infancy of creating a dedicated Advocacy Office and JDRF was focused on funding research. That was okay because the diabetes community was powerful in its own right.

Together we rallied. We worked on court cases.  Friends and family members contacted their MPs and demanded fairness. The diabetes community was represented at the Federal review of DTC fairness.

The result was legislative change.  Children with diabetes were now given the tax credit based on a certified diagnosis of type 1 diabetes.  Adults were also allowed the credit but their means test was a bit more strict.

Recently there seems to have been a change in how disability tax credit applications are handled for people with diabetes.  We have discussed it before.  One thing hasn’t changed however and that is the power of the diabetes community.

Thanks in part to the power of social media,  the community voice is louder than ever and I couldn’t be more proud!

Diabetes Canada is sending well-spoken, knowledgeable individuals to meet with CRA and voice our concerns.  JDRF has been delving into the issue for months as well.  Together they are creating a powerful voice.  Behind the scenes, there are many more grassroots groups working together.  Everyone is pushing the same  message.  “Diabetes is a 24/7 job.  People living with insulin dependent diabetes take more than 14 hours per week to perform life-sustaining therapy.”

The message is getting out there.  This issue was all over the media.  My Twitter feed has been blown up with articles and Tweets.  I am proud! The diabetes community is coming together.

Some members have voiced their frustration. This should have been finished years ago.  People living with diabetes have enough to deal with.  Fighting their government for a credit that they obviously qualify should not be another stressor. They are right of course.  I totally understand their get their pain.

I have been in this battle since the beginning.  It’s been a long one but please don’t lose hope! This is not a war that is lost.  It is a battle that will see victory.

The diabetes community is a powerful voice.  Canadians with diabetes are coming together in record numbers.  We are using that voice to let CRA and the Minister of Finance know that we are not prepared to back down.

Now is the time to keep the momentum going.  Write your letters to your MPs. Answer the call when one of the diabetes organizations calls looking for your story.  Our voice is strong.  We have come a long way and together we will finally win the war.

How to Fight for the Disability Tax Credit with Type 1 Diabetes

How to fight for the DTC with T1D

Diabetes Canada recently released a statement claiming that the Canadian Revenue Agency (CRA) is now declining 80% of applications for the Disability Tax Credit (DTC) submitted by people living with type 1 diabetes.  I cannot confirm or deny these figures. I can state that I am seeing a significant increase in the number of people contacting. They are reaching out because they or their clients have been declined for the DTC.

What is going on with the DTC?

No one seems to know.  CRA claims that there has been no change in policy.  Public concern seems to suggest otherwise.

For years, people with diabetes have often received a follow-up letter when they have made their application asking for more details from their doctor.  In the past, that letter was filled out in a similar manner to the initial application and the claim was approved.  This seems to be happening with less frequency now.

People living with diabetes are often receiving a letter stating that “an adult who independently manages insulin therapy on a regular basis generally does not meet the 14 hours per week requirement unless there are exceptional circumstances.”.  In some cases, this is followed by a request for more information but in other cases, it is part of the denial for their claim.

Does this mean that I should not apply?

No.  People living with diabetes usually spend over 14 hours per week to intensively manage their diabetes.  Granted this does not include all people living with diabetes but does include a large majority.

You should continue to send in your detailed applications. Make sure that you are adding tasks that are approved and that your total is over 14 hours.

Get our Disability Tax Credit workbook to ensure you are spending over 14 hours per week on approved tasks. 

What happens after I apply for the DTC?

Once you and your doctor have completed your forms and returned your application, there will be some time before you hear back from CRA.

Odds are high that your doctor will be contacted and asked for more information.  Again, make sure that the follow-up letter is detailed. Take care to clearly show that you spend over 14 hours per week on your diabetes care.

What if I am rejected?

If you are turned down for the Disability Tax Credit, you have a few options.

First, you can ask that your file be reassessed by another officer.  Sometimes fresh eyes will give a fresh perspective and the ruling can be changed.

Second, you can formally appeal their decision within the first 90 days of your rejection letter.  This is a detailed process but does not necessarily require a lawyer.  If you choose to go this route (and I would encourage everyone to do so), be sure to keep careful and detailed records. You must also contact CRA for a copy of your file under the Access to Information Act to better understand what you are fighting against.

Read more tips on appealing the DTC here.

Write your Member of Parliament

Finally, at any stage of the process, I would encourage you to ask for the assistance of your MP.  Whether you are thinking of applying, have applied or have been rejected, it is important for Members of Parliament to be aware of this situation.  Diabetes Canada has written a great template for people to send to their MP.  Download the letter. Be sure to personalize it to your situation and forward it on.  Remember that letters sent to a Member of Parliament in Ottawa do not require postage.

The more MPs that contact the Finance Department and ask them what is going on, the stronger the case for change and fairness.

Together we were able to get access to this credit for some people living with diabetes over 10 years ago.  Working together again, we will create change for even more individuals!

Take our short quiz to see if you might qualify for the Disability Tax Credit.

The Disability Tax Credit for Adults…What you need to know

Disability Tax Credit tips

The Disability Tax Credit is a non-refundable tax credit available to Canadians who meet very strict criteria set out by the Canadian Revenue Agency.

One of the criteria is that you must take over 14 hours per week to perform life-sustaining therapy. This is the section that many people living with diabetes qualify under.  Before you apply there are a few things that you need to know.

Having diabetes doesn’t mean that you qualify.

Not everyone with diabetes will qualify for the Disability Tax Credit (DTC).  The criteria states that children with Type 1 diabetes do qualify based on diagnosis alone. Adults (anyone over 18 years of age) however, must show that they spend over 14 hours per week on their care.

Take our quick quiz to see if you might qualify.

Why do children get the DTC so easily?

toddler from Diabetes Advocacy

The reason that children qualify for the Disability Tax Credit is because CRA feels that the time that they spend on their care AND the time that their parents spend on their care, together is equal to more than 14 hours per week.  Adults do not require the help of others for the most part. They, therefore, must prove that they, themselves spend over 14 hours per week on therapy to keeping themselves alive.

Get our workbook to see if you spend over 14 hours per week on eligible tasks. 

Do I really spend 14 hours per week keeping myself alive?

That is a question that only you can answer.  I will say that if you are intensively managing your diabetes, then more than likely, you do take an inordinate amount of time out of your day to manage your diabetes care.

A person who is not reliant on an external source of insulin to live does not have to be concerned about blood glucose readings, anticipated activity levels, impending illness,  or fat contents of meals when planning their day to day activities.  The average person does not have to draw up a syringe, put in an infusion set or calibrate a continuous glucose monitoring sensor.  A person without diabetes does not have to keep track of their insulin requirements, blood glucose levels or activity levels in a journal.

These tasks are commonplace for a person with diabetes. They are also all tasks that are recognized by CRA and count towards the 14 hour total required to be certified for the Disability Tax Credit as requiring life-sustaining therapy.

I hear that adults no longer qualify so why should I try?

diabetes is hard Diabetes Advocacy

Some adults are experiencing a harder time getting the tax credit.  There can be many reasons for your application being denied.  You may be including tasks that are not recognized by CRA as being an allowable part of therapy.  Things like grocery shopping, doctors appointments and trips to the pharmacy are not allowed to be included in your total.

Another reason that adults are being turned down is that they are not providing enough details on their own specific care.   Use the information found online and in groups as a guideline. You should then fill out the T2201 application in your own words with your own specific care details.  

Final thoughts

final thoughts from Diabetes Advocacy

Make your application your own.  Spend one week detailing what you do each day.  It will take you time to stop and write everything down but it will be worth it.  Time each task.  Note how often you perform it. If you have trouble deciding what to document, our workbook or spreadsheet might help you.

Take this week’s worth of information and then compare it to your online resources.  Eliminate the tasks that CRA won’t approve.  Add in the tasks that you did but forgot to add in your personal list.  Now total your time spent.  

Most likely, you will find that you spend more than 14 hours per week on your care.  This data can also be shared with your doctor at your appointment. It will help he/she understand who much time you do put into your care.  This will further be of use if he/she if they receive a follow-up letter from CRA asking for more details on your care.

Adults with insulin dependent diabetes who test regularly (6+ times per week), who inject insulin multiple times per day through injections or an insulin pump, and make their own adjustments to their insulin regimen should apply for the Disability Tax Credit.  If you are turned down, you have the right to ask for your application to be approved by another CRA staff member. Sometimes the second review still does not turn out in your favour but don’t despair. At that point,  you have the right to see all correspondence used in your file and begin a formal appeal process.

If you are unsure of how to fill in your application or you just want someone to review your totals, I can assist you. Email me , check out the Disability Tax Credit page or check out our helpful downloads for more information.

Most Frequently Asked Questions regarding the Disability Tax Credit.

Disability Tax Credit Basics

Its that time of year again…tax time! Here in Canada, it is also the time that many people living with diabetes learn that they could be eligible for the Disability Tax Credit (DTC). Here are a few frequently asked questions about the Disability Tax Credit that will hopefully help you as you decide if you or your loved one qualifies…

Does everyone with diabetes qualify?

No.  In order to qualify for the DTC you must use multiple daily injections of insulin via syringe or insulin pump and be intensively managing your diabetes care.

What does intensively managing your diabetes care mean?

You must be testing, injecting, logging, and adjusting your insulin doses.  These tasks must take you over 14 hours per week to perform.

Do children with diabetes qualify for the Disability Tax Credit?

Yes, children under 18 qualify without having to prove the 14 hours.  CRA assumes that the amount spent on diabetes care by both the parent and child would combine to be over 14 hours per week and therefore a diagnosis signed by the doctor on the T2201 is all that is required for their approval.

What is the Disabled Child Benefit?

This is a separate amount that can be given to you for your child if your child is eligible for the DTC and you are receiving a Child Tax Benefit.

What is a T2201?

This is the form created by CRA that must be filled out by the person with diabetes and their doctor in order to qualify for the disability tax credit.

I am not disabled! I don’t want to be labeled disabled. Why do I want to fill out this credit?

The DTC, when applied to people with diabetes,  is not about being disabled.  A person with diabetes does not qualify based on a disability. They qualify based on the clause for people who require “Life-sustaining therapy”.  This subsection is for people who spend an inordinate amount of time on the therapy that they require to live.

I have read that I can’t use the amount of time that I spend counting carbohydrates. Why not?

CRA feels that over time things like counting carbs become second nature to a person with diabetes and therefore no longer takes an inordinate amount of their time.

I have to exercise because of my diabetes.  Can I count the time I spend at that the gym?

No. Everyone should be exercising and while there is added benefits for a person with diabetes, this is not an activity that will be allowed on your application.

What tasks can I include in my application?

The Diabetes Advocacy website includes a comprehensive list of what sort of tasks are allowed and a guide of how much time it takes to perform them each day, as well as more questions answered about the Disability Tax Credit.

Do I need to send Canada Revenue Agency my log book?

There is no need. CRA simply wants to see the tasks that you do each week with a specific breakdown of how much time those tasks take.  You doctor however may ask that you keep track of what you are doing for a period of time and bring it to him/her before they will sign off on the T2201 for you.

Find out how much time you spend on diabetes-related tasks with the help of our 7 day workbook.

Who can sign the T2201?

A medical doctor must sign this form.  This can be your family doctor, pediatrician, internist or endocrinologist.  Choose the person with the most knowledge of your care and understanding of what they are signing.  Their support is vital to a successful application.

Do I need to pay someone to fill out the T2201?

No.  There is no reason to pay a fee or a percentage of your return to have this credit filled for you.  Diabetes Advocacy does offer a service to assist in filling the forms for those who are not comfortable in doing this themselves.  I also have created a booklet that guides you step by step on how to fill the forms.

Can I only apply when I file my taxes?

No, you don’t have to wait until you file your tax return to make a DTC application. You can fill out the T2201 at any time and ask for the Canadian Revenue to reassess your taxes for years back to your diagnosis or 10 years, whichever is first.

Take our short DTC quiz to see if you might qualify.

Do you have more questions about the Disability Tax Credit? Check out the disability tax credit page or email us for more answers.

Disability Tax Credit Change Happy Dance!

Disability Tax Credit change happy dance

Yesterday I did something I haven’t had to do in close to ten years…I filled out my son’s Disability Tax Credit form.

For those who are not in Canada, and those in Canada who just don’t know, the Disability Tax Credit(DTC) is a credit that people with diabetes who are insulin dependent can use on their taxes to reduce their taxable income. People who receive the DTC are also eligible for the Registered Disability Savings Plan and children, like my son, who receive the credit may receive a Disabled Child Benefit through the Child Tax Credit.

See if you might qualify for the DTC with our free quiz

The Disability Tax Credit (DTC), for people with diabetes, is not given because the government views diabetes as a disability.  It is given because people who are insulin dependent require insulin to live–they require Life-Sustaining Therapy. Life-sustaining therapy is a subcategory of the DTC.

Years ago, I embarked on a lengthy journey to see this tax credit be given to people with diabetes.  At that time some people got it, some didn’t.  It simply seemed to depend on your stamina and the whim of the Canada Revenue Agency agent processing your application.  You can read my real-time frustrations here but to make a long story short, after a lengthy time frame, the legislation was amended and people with diabetes were given more fair and equal treatment.

While some friends were given the credit for a lifetime, my son wasn’t. I
knew it was personal.

I wasn’t paranoid honest! I would go to events and see the CRA booth set up. As I walked by and they saw my name, they would instantly recognize me.  I was sure that having agents of the Canadian Revenue Agency recognize your name was not a good thing!

Visions of audits and extended periods of time spent on my returns haunted my nights. With this in mind, imagine my anxiety at having to complete a new application for my son?

I had been advised that my son’s Disability Tax Credit status would change on January 1, 2013 unless my credit was submitted earlier.  We had a diabetes clinic appointment the next week and the doctor had told me to bring along the form for her to sign.  I was still nervous.

Would they still recognize the name? My last name had changed. I have gone back to my maiden name.  Would they still make a connection with my son and his last name? Would I have to fight to prove that yes, we really and honestly do intensively manage his diabetes care?

We really do use up well over 14 hours per week in diabetes-related junk. I had won this battle once.  Thousands have since had their applications approved.

The tax agency couldn’t hold a grudge forever could they? My mind was cynical but confident. Others get the credit. I help others, including adults, get the credit.  My application would not be denied!

I then received an email from a friend.  “FYI…in case you didn’t know…” and she proceeded to send me a copy of a memo that noted CRA had made changes to the disability tax credit guidelines.  All children under the age of 18 who have diabetes and have applied for the Disability Tax Credit would now be approved without further question.

Happy dancin!! Happy dancin!!! This was AWESOME!

Disability Tax Credit 101

Disability Tax Credit Basics Its that time of the year again.  The time when the tax man comes to call and we scurry to find any way to hang onto our hard earned dollars that we can. This is also the time of year when I find myself inundated with many questions regarding the Disability Tax Credit (DTC).

I am not an accountant. I am not a lawyer. I am a mother who has been dealing with this issue since the beginning of time (or at least early 2000).  Back then, the DTC was given to some people with diabetes and denied to others. Eventually, it was given to those using insulin pumps but not those on injections. Finally after a long battle, a lot of letters and presentations, this ruling was changed and the discrimination faced by people living with diabetes was removed. (only to resurface in 2018)

The Disability Tax Credit (DTC) is given to people who are unable to perform the “basic acts of daily living” OR who require life-sustaining therapy. While the argument has been made that people with diabetes are not able to perform the basic acts of daily living, the real case has been made that they require life-sustaining therapy.  If they do not take insulin they die. It’s very simple.

So what is the tax credit and why do you want it? Well, it gets you money back on your taxes! Again, I am not an accountant but I think of it as my own extra RRSP or spouse to deduct off of my taxable income.  If you pay in any income tax, you will see a bit more money coming back to you.

If you have no income or very little income, this credit may still be important for you. It may reduce your income to the point that you now qualify for the GST. If you have a child with diabetes, it will mean that he/she now qualifies for a disabled child benefit which adds approximately another $100 to your monthly CTB.

There are still many questions from people who are not sure if they qualify. You can try this short quiz to help you decide. I will also attempt to answer a few questions that come up…

But I’m don’t want to be labeled Disabled.

The Disability Tax Credit? I am not disabled! I don’t want my child labeled this way either.  You are not claiming that you or your loved one is “disabled”.  By applying for this credit, you are stating that you or your loved one requires “life-sustaining therapy” to stay alive. As I have said, no insulin equals no life.

Do children automatically qualify?

Children under 18 years of age who have been diagnosed with type 1 diabetes do qualify for the tax credit.  It is that simple. The time spent on care by the child and parent is felt to easily total over 14 hours. A signature from your doctor regarding diagnosis will entitle you to the credit.  While reducing your taxable income, this credit will also entitle you to the Disabled Child Tax Benefit as well as the CTB you may already be receiving.

My son is now an adult. Does he still qualify?

Yes, he does.  If he has any developmental issues, this definitely means he qualifies and it should be noted on the T2201.  If he does not have developmental issues, but he still tests regularly, injects or boluses, and intensively manages his diabetes care, then he still requires life-sustaining therapy and meets the time requirements.

I have Type 2 Diabetes. Do I qualify?

This one is a little trickier.  If you are no longer producing any insulin and must take insulin injections multiple times per day or use an insulin pump, then you may qualify for the DTC. If your diabetes is still managed through diet, exercise or pills, you will not qualify. Again, you can go through our quiz to see if you may qualify. 

I don’t know what type of diabetes I have but I take needles. Do I qualify?

Again, as long as you are using multiple daily injections, logging, and testing, you most likely will qualify for the DTC.

Is it true you can’t count recovery time?

I was told that you can’t count recovery from lows.  That is right. You can’t but CRA does recognize that you can make errors in your care.  I have a lengthy list of how time is calculated in accordance with CRA guidelines. If you feel that you do these things, then you should easily qualify for the DTC.

Please remember that your doctor must be very aware of what qualifies as therapy and how you manage your time.  Your doctor now is your key to approval. If he or she understands the time you invest in keeping yourself healthy and tells CRA that, then you will get your tax credit.

To help your doctor understand how much time you spend on your care, you can share with him/her activities logged in the DTC workbook

Why do I care about getting the DTC?

Again, this is a credit that gets you money back on your taxes! I am not an accountant but I have come to think of it as my own extra RRSP or spouse to deduct.  This is an amount that comes off of your taxable income before anything else.  If you pay in any income tax, you will see more money coming back to you.

Even if you have no income or very little income, this credit can still be important for you. It may reduce your income to the point that you now qualify for the GST.  If you have a child with diabetes, remember that it will mean that he/she now qualifies for a disabled child benefit which adds approximately another $100 to your monthly CTB.

Do I have to reapply?

It depends on the person processing your file. Yes, it is that arbitrary.  I have heard of families with two people diagnosed with Type 1 diabetes who both applied for the DTC and both were given two different times to reapply.  You could be approved for two years, five years or even for a lifetime.  

Remember the Disability Tax Credit is a tax credit that you receive because you put so much work into keeping yourself of your loved one alive. Life-sustaining therapy is a real part of diabetes.  Injecting, bolusing, testing, calculating is all part and parcel of what keeps us or our loved ones alive. These are not tasks that someone without diabetes has to perform.

If you have any further questions ask your diabetes team, your accountant or contact me and I will do what I can to point you in the right direction.