General Topics Disability Tax Credits

[paul m]

Hello All. It's income tax time again and for some with a mental disability it means that they can claim a disability tax credit(DTC). There are a lot of misconceptions going around about this credit, but the long and short of it is there are several good websites that can help you decide whether or not you are eligible and how to claim it.

Starting right here. The DTC is to assist people who have a major disability. What matters is the amount of impairment that you have, not the type of disability. A person with Parkinson may not qualify, a person with depression may qualify, a person who is blind always will qualify.

The Mood Disorders Society of Cda has some good advice on it. In part this is what they have to say about those with a mental disability . " Should I bother applying for the DTC? Yes! If you feel your illness causes prolonged disability, which markedly restricts your activities of daily living (thinking, perceiving and remembering), then you should apply for this credit." http://www.mooddisorderscanada.ca/do...h%20credit.pdf

The CRA (Tax dept) also has a good site with info on this tax credit and other credits/info that a person person with a disability may want to know about.It is very easy to use: http://www.cra-arc.gc.ca/disability/ Take Care. paul m

P.S. There are some companies going around offering to get this benefit for some people. They then take a cut(as high as 30%) of what you receive . Be very carefull about this. You are responsible for what ever you sign and send to the CRA. So make sure that you know what is being sent and who is certifying your illness. The CRA is currently investigating a number of the claims filed by those companies.

http://www.cbc.ca/canada/story/2011/02/09/disability-tax-credit-revenue-agency-claims.html

[A.E.V.]

thank you for the info Paul!

[Re-O]

Thanks Paul,

I;ve never heard of the DTC until now. Not sure if it applies but it's something I can look into

[Atlantis]

Thanks Paul, the info is very helpful.

[nightowl69]

Our accountant told us about the DTC and my doctor filled out the forms. Do you know how long it takes for the government to decide if you qualify or not? Is this something I need to apply for every year or is this one form good for a few years?
Thanks.

This is a little off topic but has anyone applied for and been approved for disability benefits? Is the process difficult?

[paul m]

The DTC is like any other gov't form, sometimes it gets processed really quickly, sometimes it takes forever. Part of it depends on how clear your doctor was. If he was really clear and specified that your illness was prolonged and severe and expected to last more than a year and that it met at least one of the requirements for a disability as listed by the tax dept, then usually the form is approved very quickly.

How often you have to reapply depends on how long your doctor said that your illness may last. If he said, unknown, then you may have to reapply each year for several years. The tax dept will advise you how often you have to reapply.

In regards to disability I am unsure of what type of disability you are talking about. Both the Federal Gov't and the Ont Gov't have plans for the disabled. Both require you to be completely disabled from working or just about anyways, the type of disability does not matter.

Provincially, Ontario disabilities has a total family income portion to it. So it depends on how much your husband makes and how large your family is, but in general anyone with a spouse working full time and making much more than the minimum wage will not receive anything in Ontario form Ontario disabilities or Ontario works.

In regards to Canada pension disability. That is based on how how much and when you have paid into the Canada Pension Plan. On this plan, it does not matter what your family income is. The Gov't has a website that is reasonable easy to use and you may be able to tell if you quailify from that. Take Care. paul m

http://www.servicecanada.gc.ca/eng/isp/cpp/disaben.shtml

[mentalhealthpro]

Thanks paul m, this is something I've been wondering about for a while:

Provincially, Ontario disabilities has a total family income portion to it. So it depends on how much your husband makes and how large your family is, but in general anyone with a spouse working full time and making much more than the minimum wage will not receive anything in Ontario form Ontario disabilities or Ontario works.

I am in Ontario, and the only plan I ever hear about is Ontario Works (OW) or Ontario Disability Support Plan (ODSP). My understanding is that there is no funding offered by the Federal government. Do you have details on if/what might be available to individuals from the Federal government? I think it would only be the Disability Tax Credit and similar refunds.

[paul m]

My understanding is that there is no funding offered by the Federal government. Do you have details on if/what might be available to individuals from the Federal government? I think it would only be the Disability Tax Credit and similar refunds.

Hello Mentalhealthpro. While I did post the link to the details in my last post, I will try to make things clearer. There are some people who do not quailify for any federal funding, but a majority of people have paid into CPP or QPP. The Canada Pension Plan has a disability component built into it. To qualify for this disability pension you must be under 65, had to stop working due to illness or injury and have paid the minimum into the Cda Pension Plan for 4 of the last 6 yrs. This drops to 3 of the last 6yrs if you have paid into it for 25 yrs.

This means that anybody who is at least 22(you don't start pay CPP till you are 18) and has paid the minimum CPP premiums for the last 4 yrs is eligible. Over 400,000 people collect and the program is neither new nor small. However many people (social workers etc) who should be advising their clients to apply for this credit just don't do so. Many people lose their eligibility for CPPD because nobody tells them they are eligible till it is too late to apply. The health requirements as far as disability are about the same as for ODSP. Plus you can still apply to ODSP for a top up to their maximum and drug benefits etc.

The current min and max is $424- $1105 per mth, depending how much you made before you were disabled. The average amount is $800 . If you have kids in school and under the age of 25 there is an extra $214 per child. After the child reaches 18 this is paid directly to them if they are in school, which is a nice $2568 per yr kick in the butt for the kid while they attend school.

There are several reasons why a person might want to apply for CPPD. While it is taxable and ODSP is not, there are no means tests, nor do the amount of assets you have matter. Plus at age 65 you can apply for a fully paid up regular CPP pension. If you collected ODSP for part of your life then your age 65 CPP pension would be either reduced or non existent. Plus it's easily portable and you do not have to do anything other than chance your address with the gov't if you were to move to another province.

In my last post I had included this easy to read Gov't website, I will repost it. Take Care. paul m

http://www.servicecanada.gc.ca/eng/isp/cpp/disaben.shtml

[mentalhealthpro]

Thanks for your patience paul m,

I needed to hear twice about the CPPD program. I did not realise it could be an option instead of ODSP if certain criteria are met. I still have questions about how to determine exactly which would be better for a person if both options are available. I don't want to make a suggestion to learn later that it was not a good one. I will take any further questions to service canada. Thanks so much for pointing this out.

[paul m]

Hello MentalHealthPro. A person can collect both at once. ODSP just makes an adjustment to your income. Example: ODSP eligibility, $1000 per mth plus drug benefits , CPPD pension $800 per mth and you get no drug benefits. When you apply for them both ODSP then reduces your ck from $1000 to $ 200, but allows you to keep your drug benefits.

One might say: Ok I can get the same amount, but from two different places, why bother going though the paper work.

If you at some point gain a spouse, CPPD doesn't reduce your pension if your spouse works, whereas if your spouse worked full time at even minimum wage, ODSP would greatly reduce or eliminate your payment.

If you inherit certain assets or win a $20,000 lottery(I should be so lucky) ODSP will reduce your income to zero until you have less than $5000 in the bank. CPPD, does not do this, it is a fixed income as long as you are ill(adjusted for annually inflation).

ODSP, allows you to make $100 a mth before starting to claw back benefits(I could be mistaken, but it is around that). CPPD allows you earn $4600 a year before reviewing your case and their is no claw back provision.

If a person collecting CPPD passes away for any reason their spouse is entitled to survivor benefits as are any children going to school full time and under the age of 25. With ODSP, college age kids get nothing and the spouse is not automatically entitled to any amount.

CPPD has a small death benefit of $2500.00

CPPD is easily portable if you want to move from Windsor to Kingston, ODSP can be a chore.

CPPD has a back to work feature, where you can apply to go back to work full time. You still collect your regular ck for 3 mths and if you cannot do the job at the end of the three mths there is no new paperwork to file, you just notify them and the cks never stop. Nor do you have to pay back the 3mths where you double dipped, CPPD provides this as an incentive to return to work.

CPPD, now has a policy where they will pay for certain training for a person to go back to work, but I am unsure of how well that one works.

The years spent collecting CPPD count towards your regular CPP at age 65, miss 5 yrs work, you still get credit for those 5 yrs.

Children who are no longer dependents who are between the ages of 18 and 25 and in full time attendance at school are allowed to collect $214 per mth. The ck is sent directly to them after they reach 18 and prove they are in school. ODSP sez, sorry about that.

CPPD is taxable and ODSP is not, but usually the amount collected is not taxable anyways.

Finally, CPPD has a limited time frame in which to apply for it. Miss that time frame and you can never collect it. I hope this helps. Take Care. paul m

[paul m]

Hello MentalHealthPro. A person can collect BOTH at once. ODSP just makes an adjustment to your income. Example: ODSP eligibility, $1000 per mth plus drug benefits , CPPD pension $800 per mth and you get no drug benefits. When you apply for them both ODSP then reduces your ck from $1000 to $ 200, but allows you to keep your drug benefits.

One might say: Ok I can get the same amount, but from two different places, why bother going though the paper work.

If you at some point gain a spouse, CPPD doesn't reduce your pension if your spouse works, whereas if your spouse worked full time at even minimum wage, ODSP would greatly reduce or eliminate your payment.

If you inherit certain assets or win a $20,000 lottery(I should be so lucky) ODSP will reduce your income to zero until you have less than $5000 in the bank. CPPD, does not do this, it is a fixed income as long as you are ill(adjusted for annually inflation).

ODSP, allows you to make $100 a mth before starting to claw back benefits(I could be mistaken, but it is around that). CPPD allows you earn $4600 a year before reviewing your case and their is no claw back provision.

If a person collecting CPPD passes away for any reason their spouse is entitled to survivor benefits as are any children going to school full time and under the age of 25. With ODSP, college age kids get nothing and the spouse is not automatically entitled to any amount.

CPPD has a small death benefit of $2500.00

CPPD is easily portable if you want to move from Windsor to Kingston, ODSP can be a chore.

CPPD has a back to work feature, where you can apply to go back to work full time. You still collect your regular ck for 3 mths and if you cannot do the job at the end of the three mths there is no new paperwork to file, you just notify them.

CPPD, now has a policy where they will pay for certain training for a person to go back to work, but I am unsure of how well that one works.

The years spent collecting CPPD count towards your regular CPP at age 65, miss 5 yrs work, you still get credit for those 5 yrs.

Children who are no longer dependents who are between the ages of 18 and 25 and in full time attendance at school are allowed to collect $214 per mth. The ck is sent directly to them after they reach 18 and prove they are in school. ODSP sez, sorry about that.

CPPD is taxable and ODSP is not, but usually the amount collected is not taxable anyways.

Finally, CPPD has a limited time frame in which to apply for it. Miss that time frame and you can never collect it. I hope this helps. Take Care. paul m