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Fact versus fiction on the disability tax credit

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THIS article is on the disability tax credit, and it has been simmering in my mind for some time.

A full-page colour newspaper ad last week, promising people "government refunds" of up to $50,000 if they have a health impairment, prompted me to action.

Here's my dilemma. I don't know all of the answers, or the whole truth, about the reported problems with this issue. That makes it tough to write about it in a definitive way. However, I do feel there are some concerns that need to be put on the table and looked at by Canada Revenue Agency staff and their political masters. It's my hope this article will help.

Here's what I think I know. There is a problem with the ability of some people with legitimate disability claims to have the CRA approve those claims. These claimants depend on medical practitioners learning how to fill out complicated CRA forms in just the right way, in order to get approval. They also depend on those medical practitioners to fill out additional forms in answer to additional requests from the CRA, which are accompanied by very unsubtle reminders that any mistake could constitute fraud.

At the same time, the CRA has an obligation to properly review all such claims, only approve those that are legitimate and maintain the integrity of the tax system. There have been large-scale scams in the past, at least one supported by medical practitioners, so the need for care is required with each application.

Unfortunately, as so often happens in these situations, the innocent suffer because of a few overzealous or dishonest participants.

For many months, I have heard reports from DTC consultants and applicants that some CRA procedures involved repeated information requests to medical practitioners that ultimately resulted in denials of claims that appear legitimate. On the other hand, CRA spokespeople deny strongly that there is any such policy or procedure in place.

The truth almost certainly lies in between, but it seems clear to me an overly burdensome process can disadvantage legitimate claimants. I have seen letters signed by doctors saying they will no longer complete these forms because they feel intimidated, and only the patient suffers.

The disability tax credit is a very complicated area, as there is no set list of physical impairments, conditions or diseases that qualify a person for the DTC. Instead, the CRA criterion is whether or not a condition, or several conditions together, markedly restricts (at least 90 per cent of the time) or impairs the ability of a person to perform one or more basic functions of life. Such condition(s) must have lasted, or be expected to last, at least 12 months.

These basic functions include walking, speaking, hearing, seeing, feeding, dressing, necessary mental functions or elimination. Requiring life-sustaining therapies, such as dialysis or chest physiotherapy to facilitate breathing, (provided they are needed at least three times per week for an average of at least 14 hours), can also qualify a person.

If, even with medication, such a condition meant 90 per cent of the time a person could not walk a city block, dress or feed themselves, perform everyday mental tasks, speak or hear without taking an "inordinate amount of time" as defined by a qualified practitioner, or were significantly restricted in these activities, that person would have grounds for an application.

On the other hand, conditions that are generally managed by medication would not, alone, qualify a person for the DTC.

Your resources are CRA form T2201 -- Disability Tax Credit Certificate, the CRA website for persons with disabilities, private consultants or tax-information websites. Visit www.cra-arc.gc.ca/disability/ or the Tax Guide on Line 316 -- disability amount.

Ultimately, your doctor, optometrist, audiologist, occupational or physiotherapist or speech-language pathologist will have to complete the application form for you. Try to find a way to make sure they are educated on the process and the criteria, and pre-prepared for additional questions from the CRA.

It's very important that the qualified practitioner understands they are doing the right thing, and that this tax credit is government policy, designed to help those with a legitimate need. Let's all work together to get it into their hands.

 

Dollars and Sense should not in any way be construed as a replacement for personalized professional advice.

 

David Christianson is a financial planner and advisor with Christianson Wealth Advisors, a vice-president with National Bank Financial Wealth Management, and author of the book Managing the Bull, A No-Nonsense Guide to Personal Finance.

Republished from the Winnipeg Free Press print edition August 16, 2013 B4

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