Canada Revenue Agency refuses to pay diabetics disability tax credits Canada Revenue Agency refuses to pay diabetics disability tax credits

Canada Revenue Agency refuses to pay diabetics disability tax credits
26 Jan 2018

The Canada Revenue Agency (CRA) has stopped processing all disability tax credit (DTC) applications made by the country’s diabetics.

Hundreds of adults with Type 1 diabetes who were previously approved to receive the DTC have been denied it as a result. They have been told by the CRA that they will have to close their registered disability savings plans, allowing the government to claw back up to 75% of their value.

The DTC is the main source of personal tax relief for persons with disabilities and is worth between CAN$1,500 (US$1,166) and CAN$2,600 (US$1,944) of combined federal and provincial tax relief. The tax credit also opens up eligibility for other federal or provincial programmes such as the registered disability savings plan (RDSP), the disability supplement for the working income tax benefit and the child disability benefit.

In 2016-17, approximately 770,000 people claimed the DTC on their income tax returns, representing a combined tax saving for them of more than CAN$1.3 billion (US$1 billion).

Qualification requirements

To qualify for the DTC, an individual must be either blind, 'markedly restricted' in at least one of the basic activities of daily living, 'significantly restricted’ in two or more or the basic activities of daily living or require 'life-sustaining therapy'.

Their impairment must also have lasted, or be expected to last, for a continuous period of at least 12 months and be present all or most of the time. To qualify under the life-sustaining therapy criterion, this therapy must support a vital function and be required at least three times per week, for an average of at least 14 hours a week.

The dispute

According to the Financial Post, it is this final point that is now disqualifying diabetics. An internal memo from the CRA released under the Freedom of Information Act rules that: "Unless there are exceptional circumstances, adults with diabetes can generally manage their daily insulin therapy without taking 14 hours per week."

Diabetics' organisations JDRF and Diabetes Canada have demanded that the CRA immediately rescind the rule and restore the process of accepting certifications from doctors and nurses on the basis of their patients’ individual circumstances. They claim that the medication and medical devices needed to manage Type 1 diabetes can end up making Canadians up to $15,000 (US$11,660) a year out of pocket.

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

The Canada Revenue Agency (CRA) has stopped processing all disability tax credit (DTC) applications made by the country’s diabetics.

Hundreds of adults with Type 1 diabetes who were previously approved to receive the DTC have been denied it as a result. They have been told by the CRA that they will have to close their registered disability savings plans, allowing the government to claw back up to 75% of their value.

The DTC is the main source of personal tax relief for persons with disabilities and is worth between CAN$1,500 (US$1,166) and CAN$2,600 (US$1,944) of combined federal and provincial tax relief. The tax credit also opens up eligibility for other federal or provincial programmes such as the registered disability savings plan (RDSP), the disability supplement for the working income tax benefit and the child disability benefit.

In 2016-17, approximately 770,000 people claimed the DTC on their income tax returns, representing a combined tax saving for them of more than CAN$1.3 billion (US$1 billion).

Qualification requirements

To qualify for the DTC, an individual must be either blind, 'markedly restricted' in at least one of the basic activities of daily living, 'significantly restricted’ in two or more or the basic activities of daily living or require 'life-sustaining therapy'.

Their impairment must also have lasted, or be expected to last, for a continuous period of at least 12 months and be present all or most of the time. To qualify under the life-sustaining therapy criterion, this therapy must support a vital function and be required at least three times per week, for an average of at least 14 hours a week.

The dispute

According to the Financial Post, it is this final point that is now disqualifying diabetics. An internal memo from the CRA released under the Freedom of Information Act rules that: "Unless there are exceptional circumstances, adults with diabetes can generally manage their daily insulin therapy without taking 14 hours per week."

Diabetics' organisations JDRF and Diabetes Canada have demanded that the CRA immediately rescind the rule and restore the process of accepting certifications from doctors and nurses on the basis of their patients’ individual circumstances. They claim that the medication and medical devices needed to manage Type 1 diabetes can end up making Canadians up to $15,000 (US$11,660) a year out of pocket.

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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