Senate report calls for improved DTC, RDSP eligibility

The federal government needs to make it easier and less costly for people with disabilities to access the disability tax credit (DTC) and the registered disability savings plan (RDSP), says a Senate committee report released Wednesday.

The DTC is underused, overly complicated, and the appeals process for receiving the credit lacks transparency, the report from the Standing Senate Committee on Social Affairs, Science and Technology said.

Requiring DTC eligibility for the RDSP is too restrictive, the committee said, contributing to the program’s low take-up.

Fewer than 40% of the more than 1.8 million adults who report qualifying disabilities are claiming the DTC, the report said. In 2015 only 24.3% of people who were DTC eligible had an RDSP.

The committee studied the issue after CRA had been assessing people living with Type 1 diabetes ineligible for the DTC based on the weekly hours of therapy required to qualify. In January, National Revenue Minister Diane Lebouthillier addressed the issue, saying an internal CRA clarification letter had caused confusion and that anyone whose DTC application had been rejected for that reason would have their case reviewed.

In February the committee heard from Lebouthillier, officials from CRA and Finance, and representatives from organizations including Autism Canada, the Canadian Association for Community Living, Diabetes Canada and The Maytree Foundation.

The committee’s recommendations include:

• reviewing the appeals process to make it more “straightforward, transparent and informed”;
• coordination by CRA and Finance to ensure that people can keep all RDSP contributions for the periods during which they qualified for the DTC;
• broadening the eligibility criteria for the RDSP beyond the DTC “such that people with severe disabilities who are eligible for provincial and territorial disability support programs are able to participate”;
• reducing to five years from 10 years the period before which an RDSP beneficiary can make withdrawals from the plan after the end of the federal grant;
• moving responsibility to assess DTC and RDSP eligibility to Employment and Social Development Canada; and
• introducing legislation to make the DTC a refundable tax credit.

Read the full Senate report here.

Staff

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