Disability Tax Credit Challenges - PowerPoint Presentation

1. Disability Tax CreditChallenges and Solutions

2. What is the DTCThe DTC is a non-refundable tax credit for those with a severe and prolonged impairment in physical or mental function. Prolonged means lasting at least 12 months. A variety of functional assessments determine severity. Credit is valuable, many find qualifying for it challenging.Note: Quebec operates it own tax program

3. DTC purp0seTax FairnessOffsetting Additional Costs of DisabilityGateway To Other Benefits

4. DTC DataApproximately 1.3 million individuals are approved for the DTCMajority of applications are either over age 55 or ChildrenSeniors are one of the largest beneficiaries

5. EligibilityRequires completion of a T2201 form signed by a “qualified practitioner” and approved by Revenue Canada.Focusses on functional limitationsChallenging particularly for those in the “mental functions” categoryMedical model sets a variety of tests to determine eligibility

6. ChallengesDTC was created as a tax fairness model to offset additional costs of disabilityThose without a taxable income receive no benefitDTC has become a gateway to other federal benefits (and a few provincial programs too)Medical model challengesCost to the applicant for obtaining necessary documentationUnequal access to medical practitionersSevere and prolonged determination

7. Disability Measures Linked to DTCDTC Child Supplement Home Accessibility CreditChild Disability Benefit Home Buyers PlanMedical Expenses Tax Credit Home Buyers AmountCanada Workers Benefit Registered Disability Savings PlanChild Care Expenses Deduction Qualified Disability TrustStudents With Disabilities Disability Employment Benefits Home Accessibility Credit COVID-19 One Time Payment

8. DTC GapsGroups who experience challenges qualifying:Those in the mental functions categoryThose with diabetes, or requiring life sustaining therapy, autism, Indigenous PeoplesThose in remote areas with limited access to medical practitionersThose with episodic conditions Those living in poverty

9. Potential SolutionsRedefine the purpose of DTCCreate a simpler T2201 form and create a separate form for childrenCreate a designated DTC Help Line and DTC Navigator positionRedefine “ mental functions category”Provide medical practitioners with examples for clarification Address needs of those with Life Sustaining or episodic conditionsImprove outreach and fund disability community to assist with applicationsNo longer interpret “all or substantially all” as 90% of the timeMake DTC refundable

10. QuestionsIs there a different model that would create more equitable access?Can we create something other than a medical model?Should terms like “severe and prolonged” be part of any new criteria?Do we remain with a functional limitation model or a combination of functional limitations and diagnosis?A new income benefit will be targeted to those age 18-64, how do we assist children and seniors with additional costs of disability?Will there be a trade off between an income benefit and offsetting additional costs of disability? Or addressing tax fairness?

11. The big QuestionsDisability is continually being redefined. As the Government of Canada creates a new “disability income benefit” who should benefit and what criteria must be developed to make them eligible?.What would be the role of Government of Canada, Provincial Governments, Municipal GovernmentsWhat would be the relationship to social assistance, private disability insurance, Workers Compensation, CPPD, RDSP?How adequate would any benefit be?Should DTC be made refundable and increased in value?What are the implications for Quebec’s separate program?