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The Disability Tax Credit and ODSP

September 17, 2013
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It is possible to be enrolled in ODSP (Ontario Disability Support Program) and receive the Disability Tax Credit too. These separate disability support options can be claimed by the same person. Even so, ODSP and the Disability Tax Credit serve two distinct purposes; ODSP supplements income while the Disability Tax Credit offers significant tax refunds (between $1,500 and $40,000!).

The-Disability-Tax-Credit-and-ODSP

Each disability support program represents a different value. Because the Disability Tax Credit offers refunds based on a person’s taxable income, many ODSP recipients think they do not qualify. After all, those who are enrolled in ODSP have very little or no taxable income.

Some people are surprised to learn the Disability Tax Credit is valuable to those who do not earn a taxable income. It can be transferred to a supporting person and open doors for other financial assistance in Canada.

Transferring the Disability Tax Credit

Even though a person living with a disability may not have the capacity to work, usually there is a family member or supporting person who holds a steady job. If this person supplies food, shelter, or clothing to the person living with a disability, the income earner can claim the Disability Tax Credit on his or her behalf.

Canada Revenue Agency (CRA) ensures those who provide “basic necessities of everyday life” are offered assistance through the Disability Tax Credit. However, transferring the credit requires more work than filing the Disability Tax Credit Certificate and requesting retroactive payments.

More Disability Support Programs in Canada

One striking difference between these two disability support programs is the lack of additional opportunities extended to people relying on ODSP alone. Applying for the Disability Tax Credit, even if there is no taxable income to assure future refunds, opens the door to apply for the Registered Disability Savings Plan. Through government grants and bonds it is possible to grow savings and receive investment funds.

There are numerous benefits to applying for the Disability Tax Credit. Future tax refunds, substantial retroactive payments, and qualifying for other disability support programs are available to those who are awarded the tax credit. With this said, it is valuable for a person who does not earn a taxable income to fill out the Disability Tax Credit Certificate.

Too many eligible candidates never apply for the Disability Tax Credit because they receive faulty information. Unfortunately, most of these people can qualify for the program. Canada Revenue Agency extends this opportunity to a person living with a disability; this may be a severe and prolonged physical or mental impairment.

Speaking with the Benefit Specialists at the National Benefit Authority can provide clarity on this issue. Many ODSP recipients qualify for the Disability Tax Credit, although it is not guaranteed. The most important factor of receiving the Disability Tax Credit is to fill out the T2201 form right the first time. With this assistance and more, the National Benefit Authority helps thousands of people get the money they deserve from government.

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