March 31, 2019
Why are so many people asked to reapply for the tax credit every three to five years depending on their disability?
Because CRA has designated their conditions as being “temporary.”
The rules are spelled out in Section 2.44 of the Income Tax S1-F1-C2, Disability Tax Credit Folio.
If the impairment is permanent, it is not necessary to file another Form T2201 in later years unless the circumstances change or unless a new form is requested. If the impairment is temporary and the period of eligibility has ended, a new form must be submitted.
Granted, CRA recognizes certain physical disabilities as being permanent, such as being legally blind or quadriplegic. These individuals are not required to reapply for the DTC once their eligibility has been established.
However, as far as CRA is concerned, the majority of mental impairments are temporary, including: autism, bipolar disorder and schizophrenia.
Even though health practitioners have certified that these impairments are severe and prolonged, CRA is skeptical that the disabling effects of these impairments will continue for an indefinite period of time. In fact, CRA has determined that these conditions are unlikely to persist for more than five years.
Such an assumption reveals a serious lack of understanding of our best medical evidence that these impairments are life-long conditions, and in many cases (James W. Buchanan vs. The Queen) markedly restrict the ability "to perform the necessary mental tasks required to live and function independently and competently."
Or is it an egregious example of discrimination against some of the most vulnerable members of our society?
We do not live in biblical times when there is a reasonable expectation of a miraculous recovery. And there is no known cure for a chronic brain disorder such as schizophrenia.
Nevertheless, CRA believes that it is well within its rights to ask these individuals to reapply for the DTC on a periodic basis even though they may have been receiving the tax credit for 10, 15, 20 and more years.
In the 2016-2017 tax year, many of these individuals were among the 45,157 Canadians with disabilities denied the DTC.
Surely, CRA not only has a responsibility to follow the rule of law, but also its own policies.
Or are we asking for too much?
Lewis Carroll in his classic novel Alice’s Adventures in Wonderland suggested that government bureaucrats don’t have to play by the rules, no more than the Queen of Hearts, during a game of croquet. Alice was quick to complain:
“I don’t think they play at all fairly… they don’t seem to have any rules in particular, at least, if there are, nobody attends to them – and you’ve no idea how confusing it is.”
TAGS - dtc, cra