Brematson and Associates Inc.

Origins and key events

The Disability Tax Credit is a non-refundable tax credit implemented to recognize that individuals with severe and prolonged impairments incur additional expenses related to their disability.

In 1944, an income tax deduction was introduced for blind persons in recognition of such expenses. A few years later, it was extended to individuals confined to a bed or who use a wheelchair. In the mid 1980s, the definition of eligibility for the deduction was extended to individuals with a severe and prolonged mental or physical disability that markedly restricts a basic activity of daily living. The deduction was converted into a credit in 1988.

In March 2001, Disability Tax Credit advocate Lembi Buchanan began a two-year quest to lobby the Federal Government for a fair tax system for all Canadians. Beginning with a brief asking for a full review of the Disability Tax Credit Certificate Form, she established a coalition of like-minded organizations by fall of that year.

During this battle for reform and equitable treatment, in October 2001 the Canada Revenue Agency conducted a mass audit of 106,000 Canadians with disabilities, asking them to re-qualify for the credit they had previously been approved for. The following month, Dr. Carolyn Bennet announced the Sub-committee on the Status of Persons with disabilities would hold public hearings to review the Disability Tax Credit. Based on its finding, in March 2002 the Sub-committee tabled a report at the House of Commons titled Getting it Right for Canadians: The Disability Tax Credit.

The report criticized the CRA for practices “grossly inadequate for people with disabilities” and called for action to reform the DTC, and a response within 150 days.

Sixteen major Canadian health charities rallied behind the report. In September 2002, the Government of Canada’s response to the report did not address many of the issues the report raised, and did not acknowledge any issues with the DTC program. The response also stated the review of the 106, 000 individuals is “meeting its objectives.” By October 2002, startling statistics revealed that 30,000 of the 70,000 responders did not re-qualify, and another 16,000 did not respond at all.

In November of 2002, Buchanan and the coalition tasted victory when the House of Commons unanimously supported the recommendations of the Subcommittee on the Status of Persons with Disabilities to improve and ease access to the Disability Tax Credit. Lembi became a member of the Technical Advisory Committee, which was established to advise the government on tax measures for persons with disabilities.

Disability Tax Credit Parameters

Disability Tax Credit eligibility is determined by an assessment conducted by a medical professional. While medical doctors can certify all types of impairments, other professionals including optometrists, audiologists, occupational therapists, psychologists and speech language pathologists are limited to certifying impairments in their respective fields.

The government sets the Disability Tax Credit amount, with the challenge of determining what Disability Tax Credit recipients incur in extra out-of-pocket costs for everyday items such as housing and transportation. For persons with disabilities to provide direct measures of their incremental costs, they would have to know the difference between what they spend on current items and what spending would be in absence of their condition. An example of this would be electricity - what would the cost difference be without the use on an electric wheelchair? And so, the unique role of the Disability Tax Credit is to provide tax relief for expenses that cannot be documented for tax purposes, by providing a measure that offers general recognition of the negative impact of these everyday costs on the ability to pay tax.

The unique role of the Disability Tax Credit is to provide tax relief for expenses that cannot be documented for tax purposes.

Since the Disability Tax Credit is non-refundable it can be used to reduce taxes to zero, but does not trigger a tax refund from the government when the refund exceeds tax otherwise payable. Brematson & Associates ensures that the disabled individual and their family receive the maximum benefit from the Disability Tax Credit.

Other benefits

Below are other benefits delivered through the tax system and to persons with disabilities. For more information review our checklist and check out the links in our resource section.

• Refundable medical expense supplement
• Child Disability Benefit
• Medical expense tax credit
• Eligible dependant credit
• Child care expense deduction
• Education Credit
• Lifelong Learning Plan
• RRSP/RRIF rollover
• RESP - Registered Education Savings Plan
• RDSP – Registered Disability Savings Plan
• Home Buyers’ Plan