Problems with the Disability Tax Credit Run Deeper than it Being Non-Refundable

On Friday CTV News ran a story titled  Six in 10 Adults with Disabilities can’t Benefit from Disability Tax Credit. The main focus of the piece is on the fact that the credit is non-refundable. This means that in order to benefit from it the recipient actually has to make enough money to pay taxes. The problem being that most people who qualify for the credit don’t make enough money. The recommendation they come up with is to make the credit refundable. This way everyone who qualifies gets at least part of the credit regardless of their income.

I would absolutely love for the Disability Tax Credit (DTC) to be refundable as I am part of the 60% who qualify who don’t make enough money to benefit (shameless plug. You can buy me a “coffee” by making a donation here or by clicking the “buy me a coffee” button in the right sidebar). The thing is that problems with the DTC run a lot deeper than whether people who qualify can actually benefit.

Let’s start with the big one. The title referring to 6 out of 10 adults with disabilities is misleading. It’s really 6 out of 10 adults who qualify. This is a huge distinction because the DTC is notoriously difficult to qualify for. The application process seems designed to arbitrarily disqualify people. It is so confusing and the standard so arbitrary that doctors don’t even want to fill it out. Not because they don’t think you qualify but because they worry that if they make an error that you will be refused.

In theory the DTC is designed to “provide for greater tax equity by allowing some relief for disability costs, since these are unavoidable additional expenses that other taxpayers don’t have to face.” (quote from the government of Canada website).

You would think based on that stated intent that qualifying standards would be based on things like:

Having a disability

Having expenses related to that disability

The first of those is true, the second is not and just having a disability regardless of the addition financial burdens it brings is irrelevant. Instead prospective applicants have to wade into an arbitrary level of disability that has very little to do with defining a person’s actual experience of disability. A person’s functioning is broken down into several categories in which you must be markedly restricted in at least one or significantly restricted in at least two (see the application form here. It’s a PDF. here’s a text version).

Markedly and significantly are quite subjective terms. Markedly is at least partially defined. Let’s look at the functioning category for feeding,

Your patient is considered markedly restricted in feeding if, even with appropriate therapy, medication, and devices:
• he or she is unable or takes an inordinate amount of time to feed himself or herself;
and
• this is the case all or substantially all of the time (at least 90% of the time).

Oh hey a new arbitrary and subjective word inordinate. This is confusing enough but the part that really frustrates me is the restrictions on what qualified as feeding “Feeding oneself does not include identifying, finding, shopping for, or otherwise obtaining food”. So shopping for food doesn’t count?

So the fact that I either have to take the bus to the grocery store–which seriously limits how much food I can buy at one time based on how much my physically disabled body can carry (people who use accessible transit may be even further limited as many such services limit how many bags a passenger can have) thus necessitating more trips to the store–or pay to have my groceries delivered–which is a cost that the DTC would offset–do not get counted in the “inordinate amount of time” it takes me to feed myself. Even though I’m either out money or additional hours just to have access to food much less to prepare it.

This leads to my second major issue with the DTC. It appears to assume that applicants aren’t independent and that someone (like a parent) will be collecting it. I suspect that this is why the credit is non-refundable. The government assumes that the disabled person is in someone else’s custodial care. Someone who is not disabled and who is making enough money to qualify for tax credits. Someone who will be able to do all the necessary grocery shopping in one go.

Why do I suspect this? Just look at the application form on page 1. The first two sections are “Information about the person with the disability” and “information about the person claiming the disability amount”. There is no box to tick which indicates that they are the same person. Rather the form doubles down with “the person with the disability is:  My spouse or common law partner______ or my Dependent(please specify)______”

I mean, I guess I’m dependent on myself but I don’t think that’s what the form is getting at. I guess if we’re being literal then I also meet the two follow up questions. Why yes, I do live with myself and yes, I do depend on myself for food, shelter, and clothing.

Correct me if I’m wrong but most forms where it might filled out by a qualified applicant or a guardian (think adult passports which are applicable to anyone over 16) usually assume the person is applying for themself. They just tend to have an extra section or box that says something along the lines of “if the applicant is a minor, the parent or guardian must sign here”. It’s clearly separate. The DTC form however, doesn’t even really acknowledge that you might apply yourself. Even though it is completely legal to do so.

My third major issue with the DTC is that it requires you to requalify every five years. So you have to go the pain of convincing a doctor to fill out that ridiculous arbitrary form again.

Now I understand that some disabilities are temporary and that some people don’t qualify on a permanent basis. The way to get around that? add a box for the doctor to indicate if a condition is permanent and have them set out a reasonable timeline to requalify. If the condition is permanent drop the bureaucracy of requalifying and don’t bring it up again until you can show us peer reviewed medical evidence that something can be cured. Otherwise it just appears that the government has decided to take an official stance on believing in miracles. Which is awkward.

So as much as I would love for the DTC to be refundable. In reality for it to work as the government itself claims to intend. There needs to be a complete overhaul of the system. An overhaul that is unlikely because it would acknowledge that far more people should be qualifying and also erase some of the roadblocks to maintaining access to the DTC. All of this would cost far more than the estimate cited in the CTV piece.

The status quo keeps costs down. The government doesn’t want it questioned to deeply.

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