Christine Bunsden spent 14 years trying to get her daughter the Disability Tax Credit.
Bunsden’s daughter Courtney, now 26, was diagnosed with learning disabilities, and eventually ADHD, during childhood. She needed extra support while in school. As an adult, she has struggled to find work. But Courtney did not receive the Disability Tax Credit until 2020.
Finding a doctor to complete the required paperwork was a challenge, Bunsden says. Her daughter walks and communicates easily, so not all doctors believed she had a disability that made her eligible for the tax credit.
“Every time we would bring it up, everybody kept telling me, ‘No, she’s not going to qualify,’” Bunsden said.
Bunsden’s experience is not unique. A recent report from Statistics Canada says most Canadians with disabilities do not receive the Disability Tax Credit, Canada Pension Plan disability benefits or Quebec Pension Plan disability benefits.
According to the report — which uses 2017 tax information — 84 per cent of people with disabilities do not receive these benefits. One-third of people who reported having “severe” or “very severe” disabilities did not even apply for the Disability Tax Credit.
Experts say there is a lack of awareness about the Disability Tax Credit, and that this lack of awareness prevents people with low incomes from accessing important benefits.
Poverty reduction
The Disability Tax Credit is a non-refundable tax credit for people with disabilities that reduces the amount of income tax they pay. For the 2024 tax year, the credit is about $9,900 for adults and just over $15,600 for those under 18.
The credit is transferrable, meaning it can be applied to people who financially support relatives with disabilities, such as parents who care for a child with a disability.
In recent years, eligibility for several benefits for low-income people with disabilities has been tied to receiving the Disability Tax Credit.
But the credit was not originally intended to reduce poverty, says Jennifer Zwicker, a professor at the University of Calgary who has researched why people do not receive the Disability Tax Credit. The credit was originally meant to offset the extra costs of living with a disability.
“It is now being used as a gateway, an eligibility for other programs,” she said.
For example, only Disability Tax Credit holders are eligible for the Canada Disability Benefit, a federal payment of $200 a month to low-income adults with disabilities, which is set to begin in July.
Zwicker is a member of the Canada Revenue Agency’s Disability Advisory Committee, which makes recommendations to the tax agency about how to improve the Disability Tax Credit. It has repeatedly said the credit should be made into a refundable benefit.
“For those with little or no taxable income, the credit does not provide a financial advantage,” the committee says in its latest report, released March 5.
Making the credit refundable would give people money — a tax refund. “This change is crucial for ensuring that low-income Canadians can fully benefit from the credit, as individuals with disabilities are twice as likely to live in poverty compared to the general population,” the disability advisory committee’s report says.
The committee’s report lists more than 15 government benefits that tie eligibility to the Disability Tax Credit. This includes financial benefits for children with disabilities, credits for home renovations to increase home accessibility, and the Registered Disability Savings Plan, a savings account for people with disabilities.
Overwhelming applications
However, not everyone who qualifies for the Disability Tax Credit receives it.
In 2022, 36 per cent of people who qualified for the credit did not claim it on their income tax, the Disability Advisory Committee’s report says. Statistics Canada estimates that in 2017 between $300 million and $800 million went unclaimed because people did not claim their Disability Tax Credit.
Some groups — such as Indigenous peoples or newcomers to Canada — are less likely to apply for the Disability Tax Credit. The committee recommends the agency create plans to reach out to these groups.
“There’s a real need for better strategies to outreach to communities that would be eligible and need support in applying,” said Zwicker. “Right now, there aren’t a lot of those strategies.”
Many people never complete the application to find out if they qualify for the credit.
A medical professional must complete a 13-page form that includes details about an applicants’ physical abilities and other activities. Eligibility for the tax credit is not based just on someone’s diagnoses, but rather on the difficulty someone has completing daily living tasks because of their disability. Doctors often charge for these assessments, making it difficult for some low-income people to pay for them.
Many people find this process overwhelming, says Jill Teeple, executive director of Partners for Planning, a non-profit that helps people with developmental disabilities and their families with financial planning.
The income tax system can intimidate anyone, she says. It can be even more burdensome for families who already fill out multiple forms to get disability-related services.
“It’s a lot of work,” Teeple says of applying for the Disability Tax Credit. “You’ve got to want it.”
Not all doctors know how to fill out the form properly. The Disability Advisory Committee recommends increasing education for doctors about completing these forms.
If the doctor does not fill the form out properly, the Canada Revenue Agency may reject the application. And some people may not know they can apply again.
Money back
Some people also hesitate to apply for the Disability Tax Credit because they do not consider themselves to be disabled, says Teeple.
Teeple, whose organization runs multiple sessions a year about the Disability Tax Credit, encourages people to view it the same way as claiming a tax credit for a charitable donation, medical expense or retirement contribution.
“There’s nobody out there that says, ‘I’m not going to claim that tax deduction. I’d rather just pay more tax,’” she says.
“A tax credit is really the government’s opportunity to give you back money you’ve already given them.”
Catherine Bunsden, who struggled for years to get her daughter the Disability Tax Credit, knows the difference it can make. Once she found a doctor who was willing to fill out the paperwork, the approval from the Canada Revenue Agency came quickly.
In 2023, she launched a company, Benefits2, that helps people apply for the Disability Tax Credit and connects them with doctors who can help them with the forms.
So far, she’s helped around 2,500 people. Interest grows monthly. She feels rewarded every time her customers succeed — and most do.
“A lot of people, when they get this, there’s a huge validation for them,” she said.
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