How can the Disability Tax Credit help seniors?
Determining the appropriate care and assistance for our aging parents and loved ones can be daunting and nursing homes, retirement centres and care facilities can quickly result in concern for finances.
Consider that some seniors qualify for the Disability Tax Credit (DTC) – a non-refundable tax credit meant to provide relief for people living with disabling conditions. Claiming the Disability Tax Credit can result in a significant tax refund.
What is the Disability Tax Credit worth for seniors?
The maximum Disability Tax Credit amount someone may receive is $20,000 (for qualifying seniors) – but amounts vary depending on hundreds of combinations of factors (including how much income tax one paid, where you live, if one is enrolled in any government-run financial programs, etc).
Even if some seniors may not have paid enough income tax to benefit, the Disability Tax Credit could be transferred to a supporting family member.
How can seniors qualify for the Disability Tax Credit?
Contrary to popular belief, there’s no such thing as a medical diagnosis for “disability” – and the Canada Revenue Agency (the government authority that administers the DTC) sets the rules for who qualifies for the DTC:
- Do you have a restriction in a basic activity of daily living (BADL)?
One of: walking, feeding, mental functions, vision, dressing, hearing, eliminating or bowel/bladder functions, or do you require life-sustaining therapy.
- Is your restriction marked or significant?
Your restriction must last for at least 12 months continuously and take at least 3 times longer than normal to perform the BADL, or you have more than 1 restricted BADL that must exist 90% of the time.
This means one’s qualification for the DTC has less to do with one’s diagnosis and relies on a qualified medical practitioner to certify someone according to the above DTC criteria.
So there’s a lot of room for interpretation – and sometimes misinterpretation – by all parties involved in the DTC process.
Additional Disability Tax Credit benefits for seniors
There’s a reason why the DTC is casually known as a “gateway” tax credit – you need the DTC to qualify for additional senior benefits.
For example, you’ll need to be approved the Disability Tax Credit before you can claim any attendant care expenses. An eligible senior (and his/her supporting family members) may claim attendant care expenses such as housekeeping, laundry, transportation and meal preparation.
That summarizes how seniors and their family can benefit from the Disability Tax Credit. Consider checking out the Disability Tax Credit for yourself or a family member.