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A Brief History of the Disability Tax Credit

August 20, 2013
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The Canada Revenue Agency has money reserved for people with disabilities. These funds are available to those who are granted the Disability Tax Credit (DTC). The benefit comes in the form of a standard deduction that is applied to an individual’s taxable income. This lowers the amount of taxes owed with the intention of offsetting medical expenses and the cost of living with a disability.

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Many people do not know about the Disability Tax Credit even though the Canada Revenue Agency has offered this standard deduction for years. In this article, explore how people with disabilities have benefited from these tax breaks with a brief history of the Disability Tax Credit.

Today’s Disability Tax Credit

Over time, the Disability Tax Credit has evolved. People who struggle with “severe and prolonged” challenges that impact physical or mental health may qualify for these tax benefits. If an individual struggles with tasks of daily life, he or she may be awarded the DTC. There are two categories of daily struggles: markedly restricted or dependent on life sustaining therapies.

Markedly Restricted

Being markedly restricted means a person has trouble in one or more of the following areas: walking, feeding, dressing, mental functions, speaking, hearing, and/or waste elimination. With advancements in medication and therapies there are treatments that can supplement these activities. Those who depend on life sustaining therapies to increase quality of life are also able to receive the standard deduction on taxable income.

Life Sustaining Therapies

A medical professional must note that an individual is markedly restricted or dependent of life sustaining therapies. A supplemental treatment program may include the use of devices or medications that take up 14 hours of an individual’s time (or more) per week.

A Brief History of the Disability Tax Credit

Prior to 1986, the Canada Revenue Agency had a standard deduction reserved for individuals who used wheelchairs or were blind. When a broader definition of disability became necessary, taxable income benefits were offered to people with other physical handicaps and mental illnesses as well. This resulted in the introduction of the Disability Tax Credit in 1988.

In 2005, the definition evolved further to include all persons who struggle with “severe and prolonged impairments in mental or physical functions.” This opened the door for people who faced challenges with common day-to-day tasks to receive disability benefits.

Now, Canada Revenue Agency offers financial support to people who are not able to function on pace with society. This means that a person does not need to be labeled as having a significant disability to receive the standard deduction on taxable income. Instead, he or she only needs to report (with a medical professional’s confirmation) the multiple areas in which he or she is markedly restricted or dependent on life sustaining therapies.

Before 2005, a person with significant pain may not have qualified for financial support from the government of Canada. Today, individuals who struggle with day-to-day mental or physical operations are able to receive the benefits they need and deserve.

Any person with severe and prolonged pains or disturbances may qualify for the Disability Tax Credit. Contact the National Benefit Authority, the largest agency serving people with disabilities, for a free consultation. Benefit specialists are available to discuss unique symptoms and challenges. These interruptions to daily life are entitled to the financial support.

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