Conservatives would expand disability tax credit eligibility

The Conservative Party of Canada is proposing to expand access to the disability tax credit (DTC), increasing the number of Canadians who would be eligible, should it form the next government.

The Tories say they would lower the number of hours spent on life-sustaining therapy required to qualify for the DTC to 10 hours per week from the current minimum of 14 hours per week.

In addition, the Conservatives would clarify that the activities that count towards the hours-spent minimum threshold would include time spent determining dosages of medical food and formula, and activities related to determining dosages of medication, including dietary or exercise regimes.

The changes would be implemented starting in 2020.

According to the Parliamentary Budget Office (PBO), an additional 35,000 Canadians who need life-sustaining therapy would qualify for the DTC under the Tory proposal. The policy would cost nothing in 2019-20, $40 million in 2020-2021, and $43 million in 2021-2022 in terms of lost government revenue, according to the PBO.

The DTC is available to eligible individuals with “severe and prolonged impairments” and is intended to help offset the higher costs often associated with living with a disability. The DTC provides both a federal and a provincial non-refundable tax credit that can result in tax savings of $1,500 to $2,600 a year. People with disabilities can claim the DTC themselves, or they can share it with a spouse, common-law partner or another supporting family member.

In addition to the tax savings associated with the credit directly, the DTC also allows an eligible individual to access benefits such as the registered disability savings plan, the child disability benefit, the home accessibility credit and a more flexible registered education savings plan.

In 2017, the Canada Revenue Agency began using a new qualification letter for DTC applications for life-sustaining therapy that appeared to put in jeopardy the eligibility of some Canadians living with Type 1 diabetes. An ensuing controversy led to a decision by the Liberal government to have the CRA return to using the previous qualification clarification letter, and to review the applications that had been denied because of the change.

Later that year, the Liberals announced they would reinstate the Disability Advisory Committee (DAC), which had been disbanded by the previous Conservative government in 2006. In May 2019, as part of its first annual report on enabling access to disability tax measures, the DAC recommended that the government eliminate a minimum-hours requirement altogether for life-sustaining therapy.

Rudy Mezzetta

Rudy is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on tax, estate planning, industry news and more since 2005. Reach him at rudy@newcom.ca.