It'll soon be easier for Canadians to apply for the disability tax credit
Eligible Canadians will soon have easier access to the disability tax credit (DTC).
The federal government announced several new measures in the spring economic update, including improvements to the DTC application process.
“Each year, more Canadians are accessing the Disability Tax Credit, yet barriers in navigating the application process remain for many,” reads the spring economic update. “The government is committed to supporting persons with disabilities and their families to access all the supports they need.”
The DTC is a non-refundable tax credit that reduces the amount of income tax paid by individuals with physical or mental disabilities, or their supporting family members.
Eligibility for the credit is a key requirement in order to be qualified for other benefits, including the Canada Disability Benefit, the Child Disability Benefit, and the Registered Disability Savings Plan, along with the Canada Disability Savings Grant and Bond.
Currently, in order to claim the DTC, you must have a medical practitioner certify the effects of your impairment, which the government says “does add to their administrative burden.”
You may qualify if you have a marked restriction in at least one category: walking, mental functions, dressing, feeding, eliminating (bowel or bladder functions), hearing, speaking, vision, or require life-sustaining therapy.
To improve the DTC application process and to reduce paperwork for medical practitioners, the spring economic update proposes three new measures.
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The first is to streamline the application process for individuals with a formal diagnosis of certain long-lasting medical conditions.
“These conditions, listed in the Tax Measures: Supplementary Information annex, have been identified through the Canada Revenue Agency’s (CRA) experience in processing applications as satisfying the disability impact criteria for the credit,” reads the economic update.
Ottawa notes that the proposal won’t change the disability criteria to qualify for the tax credit. The CRA would continue to have the authority to ask for additional information to verify that these criteria are met. The measure would kick in 2027 for the 2026 and subsequent taxation years.
The government also plans to expand the list of medical practitioners who can certify eligibility for the tax credit to include podiatrists (for a specific type of impairment) and broaden the types of impairment that can be certified by physiotherapists, speech-language pathologists, and occupational therapists within the scope of their training and practice. This measure would apply to DTC certificates issued after 2026 for the 2027 and subsequent taxation years.
Lastly, the government plans to recognize provincial or territorial public guardians and trustees as being qualified to certify for the DTC for adults in their care for property matters who have a valid certificate of incapacity based on a medical practitioner’s assessment of their mental impairment. This measure would apply to the 2026 and subsequent taxation years.
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“These changes are expected to provide $345 million over six years, and $86 million per year ongoing, in tax relief under the Disability Tax Credit and via increased payments of federal benefits (such as the Canada Disability Benefit and the Child Disability Benefit), starting in 2025 to 2026,” reads the economic update.
The spring economic update also proposes to provide $42.5 million over five years, starting in 2026 to 2027, to the CRA to administer the changes.
For more details, check out the spring economic update.
This isn’t the only measure the government introduced in the spring economic update that aims to help the affordability crisis. Canadians could get up to $5,000 to get certified for in-demand jobs.
It is also planning to lower the contribution rate for a key benefit, which means working Canadians will see a slight increase in their paycheques next year.
Additionally, Prime Minister Mark Carney announced Canada will be launching its first sovereign wealth fund.