Why is Uptake of the Disability Tax Credit Low in Canada? Exploring Possible Barriers to Access

Auteurs-es

DOI :

https://doi.org/10.11575/sppp.v11i0.43187

Résumé

Disability supports should be designed to provide benefit and not burdens to eligible recipients. Unfortunately, this is not a reality when it comes to one of the main benefits open to Canadians with disability: the federal Disability Tax Credit (DTC). Designed to recognize some of the higher costs faced by people with severe disabilities and their caregivers, the DTC appears to be more of a burden for many, with estimated utilisation unacceptably low at around 40 per cent of working-aged adults with qualifying disabilities.

 

Low uptake is a concern not only because people are missing out on the credit itself but also because eligibility to the DTC – which is not automatic – is a gateway to other important and more valuable benefits such as the Child Disability Benefit and Registered Disability Savings Plans (RDSP).

 

Why is take up low? Awareness and a burdensome application process are likely key contributing factors. There is also a lack of clarity around eligibility rules, which have been criticized for being open to interpretation, failing to accurately reflect the practicalities of living with a disability and requiring people with impairments in mental functions to meet a higher bar than for those with physical impairments.

 

The design of the DTC may also be limiting utilization of disability benefits such as RDSPs that require DTC eligibility as a prerequisite. As a non-refundable tax credit, the DTC is a tax-fairness measure that benefits those who pay taxes (provides no monetary value to those without taxable income). It is poor design to use eligibility to a benefit, that does not provide value to all individuals with qualifying disabilities, as a gateway to benefits with different policy objectives.

 

A policy overhaul of the DTC, and broader disability policy in Canada, is long overdue. This will require effort and the will to make the necessary changes to improve existing policies. Boosting awareness of the DTC, gaining a better understanding of the target population (particularly children with disabilities) and monitoring data on the DTC’s usage and reach, would go a long way towards improving uptake. Creation of a clear and transparent review and appeals process to replace the current and often inconsistent one would further knock down barriers to access. Improving the disability assessment process for the DTC and for other key disability benefits is also essential. More broadly, it is time for Canada to consider new coordinated policy measures that guarantee improved access, independence, portability and support for individuals with disability – particularly those living in low income.

Références

Arim, R. (2015). Canadian Survey on Disability, 2012 – A profile of persons with disabilities among Canadians aged 15 years or older, 2012. Retrieved from http://www.statcan.gc.ca/pub/89-654-x/89-654-x2015001-eng.pdf

Battle, K. (1988). The 1987 white paper on tax reform. Journal of Law and Social Policy, 3, 66.

Bill C-462 (Historical). Disability Tax Credit Promoters Restrictions Act. House Debate. (2013). Retrieved from https://openparliament.ca/bills/41-2/C-462/

Buchanan v. The Queen, 2001 CanLII 763 (TCC) (2001).

Canada Revenue Agency. (2014a). DTC eligible person with disability as at 2014 by province by age.

Canada Revenue Agency. (2014b). Government of Canada marks International Day of Persons with Disabilities by encouraging Canadians to take advantage of available benefits [Press release]. Retrieved from https://www.canada.ca/en/news/archive/2014/12/government-canada-marks-international-day-persons-disabilities-encouraging-canadians-take-advantage-available-benefits.html

Canada Revenue Agency. (2015). Disability Tax Credit Public Consultations. Retrieved from https://www.canada.ca/en/revenue-agency/services/tax/individuals/segments/tax-credits-deductions-persons-disabilities/disability-tax-credit/disability-tax-credit-public-consultations.html#vrvw_dtc

Cohen, K. R. (2017, 10/30/2017). [Letter to the Ministers of Finance and National Revenue].

Employment and Social Development Canada. (2015). Evaluation of the Canada Disability Savings Grant and Bond 2008-2009 to 2011-2012: Phase I. Final Report. Retrieved from http://publications.gc.ca/collections/collection_2015/edsc-esdc/Em20-25-2015-eng.pdf

Employment and Social Development Canada. (2017). Canada Disability Savings Program. Annual Statistical Review 2015: Employment and Social Development Canada.

Goffin, P. (2017, 01/13/2017). Disability tax credit not extended to those with mental illness. The Star. Retrieved from https://www.thestar.com/news/gta/2017/01/13/disability-tax-credit-not-extended-to-those-with-mental-illness.html

JDRF. (2017). Disability Tax Credit and type 1 diabetes. Retrieved from https://www.jdrf.ca/t1dhub/learn/t1d-insider/disability-tax-credit-and-type-1-diabetes/

McDermid v. The Queen, 2014 TCC 264 (CanLII) (2014).

Mendelson, M. (2015). Options for a Refundable Disability Tax Credit for 'working age' persons. Retrieved from

Mitra, S., Palmer, M., Kim, H., Mont, D., & Groce, N. (2017). Extra costs of living with a disability: A systematized review and agenda for research. Disability and Health Journal.

Office of the Auditor General of Canada. (2017). 2017 Fall Reports of the Auditor General of Canada to the Parliament of Canada. Report 2—Call Centres—Canada Revenue Agency. Retrieved from Office of the Auditor General of Canada: http://www.oag-bvg.gc.ca/internet/English/parl_oag_201711_02_e_42667.html

Philipps, L. (2001). Disability, poverty, and the income tax: The case for refundable credits. Journal of Law and Social Policy, 16, 77.

Prince, M. J. (2016). Inclusive Employment for Canadians with Disabilities: Toward a New Policy Framework and Agenda. IRPP Study(60), 1.

Ross, M. (2016, 07/29/2016). Canadian Psychiatrists Aren't Doing Enough For Their Patients. The Huffington Post. Retrieved from http://www.huffingtonpost.ca/marvin-ross/canadian-psychiatrist-tax-credit_b_11248224.html

Schizophrenia Society of Ontario (2014). [Submission from the Schizophrenia Society of Ontario for the Disability Tax Credit Consultation].

Simpson, W., & Stevens, H. L. (2016). The Disability Tax Credit: Why It Fails and How to Fix It. SPP Research Papers, 9(24).

Smart, M., & Stabile, M. (2006). Tax Support for the Disabled in Canada: Economic Principles and Options for Reform. Canadian Tax Journal, 54(2), 407-426.

Statistics Canada. (2004). Participation and Activity Limitation Survey, 2001 [Canada]. Retrieved from http://odesi1.scholarsportal.info/webview/index.jsp?object=http://142.150.190.11:80%2Fobj%2FfStudy%2Fpals-82M0023-E-2001&mode=documentation&v=2&top=yes

Statistics Canada. (2012). Canadian Survey on Disabiilty 2012. Table 115-0004 - Adults with disabilities, by severity, age group and sex, Canada, provinces and territories. Retrieved from: http://www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=1150004&tabMode=dataTable&p1=-1&p2=11&srchLan=-1

Statistics Canada. (2017). Table 051-0001 - Estimates of population, by age group and sex for July 1, Canada, provinces and territories, annual (Persons) Table 051-0001 - Estimates of population, by age group and sex for July 1, Canada, provinces and territories, annual (Persons) Retrieved from: http://www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=0510001&tabMode=dataTable&p1=-1&p2=9&srchLan=-1

Till, M., Leonard, T., Yeung, S., & Nicholls, G. (2015). A Profile of the Labour Market Experiences of Adults with Disabilities among Canadians aged 15 years and older, 2012: Statistics Canada.

Tjorman, S., Brown, R. D., Arnold, B. J., Bach, M., Beachell, L., Beatty, H., . . . Lord, G. (2004). Disability Tax Fairness. A report of the Technical Advisory Committee. Retrieved from Ottawa, ON:

Wall, K. (2017). Low income among persons with a disability in Canada. Insights on Canadian Society. Retrieved from http://www.statcan.gc.ca/pub/75-006-x/2017001/article/54854-eng.pdf

Watts v. The Queen, 2004 TCC 535 (CanLII) (2004).

Weissman, P., & Buchanan, L. (2016). Request to reinstate the Disability Advisory Committee. Retrieved from http://www.fightingforfairness.ca/content.php?navID=23

Williams, R., & Prowten, D. (2017, 10/31/2017). [Letter from JDRF and Diabetes Canada to the Honourable Diane Lebouthillier regarding joint recommendations aimed at ensuring access to the Disability Tax Credit for Canadians with diabetes].

Woolley, F. (2015). Social Benefits in the Canadian Income System. In B. Dahlby (Ed.), Reform of the Personal Income Tax in Canada (pp. 143). Toronto: Canadian Tax Foundation.

Zwicker, J., Zaresani, A., & Emery, J. H. (2017). Describing heterogeneity of unmet needs among adults with a developmental disability: An examination of the 2012 Canadian Survey on Disability. Research in Developmental Disabilities, 65, 1-11.

Téléchargements

Publié-e

2018-01-15

Numéro

Rubrique

Briefing Papers