Disability Credit Rejects: Close to 60% of Taxpayers Win Back Rights

Last year, following a bitter public controversy, the CRA re-assessed 2,267 rejected claims from diabetics applying for the Disability Tax Credit (DTC). The good news? Now 1,326 have now been approved – that’s 58 percent! But these Canadians will wait up to 30 weeks for refunds; an issue that has prompted a further Senate response.

Despite CRA improvements to accessibility, The Senate Committee on Social Affairs continues to have concerns about the processing delay, as well as the 941 applications that remain in rejected status. The core issue? The committee cites unfair access to the DTC for people with a variety of disabilities, including diabetes.

After the public outcry, the response from the CRA seemed promising. The CRA reinstated the Disability Advisory Committee (DAC), and revisited the claims from diabetics accessing the benefit under the category of life-sustaining therapies. But Diabetes Canada says the long 30-week timeline for refunds means that many diabetics will struggle to care for their health.

The Senators have also noted that they don’t understand the justifications for the rejected claims in the first place. 

Among the sixteen recommendations made on the report from the The Senate Committee on Social Affairs are a recommendation regarding increased transparency on eligibility criteria, and the need for better explanations to accompany rejected claims. Additionally, they suggest that agents from the CRA consult with the ministries of Health and Employment and Social Development before rejecting claims if there is any question about eligibility.

Diabetes Canada is also urging the government to reconsider two key points. One, that all activities related to administering insulin and managing diabetes be counted towards the 14-hour minimum required for eligibility as life-sustaining therapies. And two, that ineligibility for the DTC will not automatically mean that people are also deemed ineligible for the Registered Disability Savings Plan (RDSP).

While collaborative efforts are being made to improve access to the Disability Tax Credit, Canadians who have previously had claims rejected should work with a Distinguished Financial Advisor (DFA) – Tax Services Specialist; they should also and ensure that they appropriately document their activities associated with life-sustaining therapies and submit the information required when claiming the DTC. A DFA can also assist with the appeals process for rejected claims.

Additional educational resources:

1. Major life events, including illness and disability, can trigger tax consequences that all Canadians should be aware of. Evelyn Jacks’ Essential Tax Facts empowers you with the information all Canadians must know as taxpayers.
2. Are you a tax professional preparing returns, and dealing with issues like claiming the DTC? EverGreen Explanatory Notes should be your primary resource as an educational library on all things tax.

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