Medical Conditions That Qualify for Disability Tax Credit

Posted on February 14, 2021

The inability to work can cause considerable financial troubles.

You might live in Canada and find yourself managing a significant health condition. If so, you might qualify for the Disability Tax Credit (DTC). In some cases, those who qualify for the DTC can receive up to $25,000.

The benefit is available to both temporarily and permanently disabled Canadian citizens. To qualify for the DTC, you must have a health condition that restricts your ability to manage daily activities of living.

Many people aren’t aware that they can qualify for the Disability Tax Credit. However, this benefit can serve as an important lifeline during a most challenging time of life.

To learn more about medical conditions that qualify for the Disability Tax Credit, keep reading.

List of Disabilities That Qualify for Tax Credit

If you become disabled, you could receive up to a $25,000 lump sum benefit. You might also have eligibility for $2,500 for the current and each following tax year.

There are a few common conditions that regularly qualify for the Disability Tax Credit. These conditions include:

• Breathing disorders
• Crohn’s disease
• Inflammatory bowel disorder
• Knee or hip problems
• Limited upper body mobility
• Osteoarthritis
• Slowed walking

There are also several other reasons that might enable you to qualify for the benefit.

There Are Many Medical Conditions That Qualify for the Disability Tax Credit

If a physician diagnoses you with a condition that slows your ability to manage daily functions, you might qualify for the DTC. However, many people fail to apply for the benefit.

One reason for this is that most people think that the DTC is only for severely disabled individuals. Furthermore, they may have heard the same sentiment expressed by tax advisors and medical professionals.

The DTC and Confidentiality

Also, some people don’t apply for the Disability Tax Credit because they worry about getting labeled as disabled. In this regard, it’s important to understand that claim information is confidential within the Canada Revenue Agency (CRA).

When you make a claim, only your physician and the CRA are authorized to access your information. Nevertheless, some people express concern when applying for the DTC for this very reason.

The CRA is bound by strict federal privacy guidelines. Those guidelines prohibit the agency from disclosing your tax information without your written permission. For this reason, you’re assured that your DTC application will remain confidential if you should ever need to apply.

Understanding Qualifying Disabilities

It’s important to understand the definition of disability as it applies to the DTC. There are two qualifying levels of disability for the Disability Tax Credit. These levels are outlined in the Disability Tax Credit rules.

The first qualifying level is for “disabled” individuals. This group is unable to perform a basic activity of daily living.

The second qualifying level for the DTC is “slowed” individuals. This group takes a significant amount of time to perform a basic activity of daily living.

You might qualify for the DTC if you fit one of these two definitions. If you’re classified in either group, however, you could qualify for the same amount of benefits.

The Disability Tax Credit

The annual DTC is a non-refundable tax credit. It helps those who are disabled to support their needs. It works by reducing the amount of income tax that you might pay.

Once you’re eligible for the DTC, you can claim the disability amount. The benefit may also include a supplement for children under the age of 18.

The purpose of the Disability Tax Credit is to create greater tax equity. It helps to provide some relief for disability costs.

The costs associated with managing a disability are unavoidable. From the perspective of the CRA, other taxpayers don’t have to manage these kinds of expenses.

Also, eligibility for the Disability Tax Credit program can qualify you for other federal, provincial, or territorial programs. For instance, DTC eligibility might qualify you for the registered disability savings plan.

It can also enable you to qualify for the Canadian worker’s benefit. Also, eligibility might allow you to receive a child disability benefit.

The disability tax benefit can prove highly beneficial for those who need it. However, you shouldn’t rely on it as your sole source of income if you should become disabled—more on protecting your income against disability in a moment.

How to Get the Disability Tax Credit

If you should qualify for the Disability Tax Credit, there’s no guarantee that you’ll continue to receive benefits each year. You could receive benefits for one year. However, you might find that you get denied the next.

The CRA requires that you reapply for the Disability Tax Credit each year. At that time, the agency will assess your eligibility to continue receiving the DTC.

For many people, the DTC can mean an average of $1,500 to $2,000 of savings every year. This benefit is significant for someone living on a limited budget.

In some instances, a disabled individual may need life-sustaining therapy at least three times a week. If these sessions extend at least 14 hours a week, an individual will most likely qualify for the DTC. For others, however, eligibility isn’t as clear cut.

The CRA follows specific eligibility criteria based on the Income Tax Act. Each year, your disability must meet the cumulative effect of a marked disability in one basic activity of daily living. What that means, however, isn’t exactly clear.

In most cases, you’ll need a physician or other health professional to certify that you are markedly restricted in at least one daily activity of living. Furthermore, this issue must persist all or most of the time. Alternatively, you may need a physician to certify that the cumulative effect of your restrictions across several activities is the same as being markedly restricted in one basic activity.

Protecting Your Income With Disability Insurance

Every day, someone gets injured or diagnosed with a serious condition. These ailments can range from minor to life-altering.

In some instances, these individuals may find that they can’t work for months. Yet others may never work again.

Either scenario can cause a considerable financial strain. After a serious diagnosis, the last thing you want to worry about is managing a series of seemingly never-ending bills. If you plan ahead, however, you can recover or manage your condition with peace of mind.

Disability insurance can cover your financial needs if you’re ever severely injured or become disabled. It will help you to cover your expenses if you find that you are unable to work.

For example, you might get in an accident. Alternatively, a physician may diagnose you with a major illness. Either of these situations creates a scenario where you may not have the ability to perform your workplace duties.

In this event, disability insurance helps to cover your expenses during the time that you’re unable to work. If you choose a good policy, you might receive almost as much as your regular pay cheque.

Accessing Disability Coverage

Having to prove your eligibility for the DTC year over year can be challenging. For this reason, it’s a good idea to consider other alternatives for protecting your income.

For example, you might work for a large company. If so, your employer may provide disability insurance with your benefits package. If you’ve worked in your role for some time, you may already have coverage.

However, this kind of coverage is typically generic. For this reason, it may not suit your needs.

Luckily, you can also purchase your own disability insurance. Herein lies your opportunity to access the perfect policy to cover your needs if you should ever become disabled. 

Start Your Search for the Right Disability Policy Today

Now you know more about medical conditions that qualify for the Disability Tax Credit. What you need now is a convenient way to find the best private disability policy that can protect your income.

Insurdinary is your source for accessing a range of financial promotions and offers easily. Our website can help you compare rates and save money on important insurance products.

We’re Canada’s leading insurance rate comparison and financial promotion site. We’ll help you get informed before you get insured.

Contact Insurdinary 1-877-574-RISK (7475) to learn more about getting the right insurance plan for your needs. Alternatively, please feel free to connect with us online to start receiving quotes.

Next Post:
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram