Facts About the Proposed Refundable Disability Tax Credit

Many people in Canada believe the Disability Tax Credit should be refundable for those who don’t earn the income to take advantage of it. Right now millions of Canadians qualify for this tax credit, and many of them go to organizations such as The National Benefit Authority to traverse the application process and get assistance in the form of a reduction in tax obligations.  In recent times, there have been proposals from many concerned citizens to create a Refundable Disability Tax Credit.

Should the Disability Tax Credit be Refundable?

Here are a few facts to help you decide for yourself:

  • Approximately 500,000 disabled Canadians are currently living on assistance programs such as welfare.
  • Disabled persons living on welfare or similar programs do not typically earn sufficient income to benefit from the Disability Tax Credit.
  • The Disability Tax Credit is not refundable, so for those who do not earn sufficient income to pay income taxes, this benefit may be useless. Not everyone has a qualified supporting relative who can claim the Disability Tax Credit on his or her behalf.
  • Supporters of a Refundable Disability Tax Credit assert that the disability support program benefits in most provinces leave disabled recipients well below the poverty line, or in the best cases they still impose frequent status reviews, asset limits, etc.

The Proposal

Supporters of a Refundable Disability Tax Credit believe that this tax credit should be refundable for the maximum current value of $1,715 to make up for what they see as a great inequity. In this proposed arrangement, any disabled person eligible for the tax credit would get this maximum value even if they are unemployed and/or not earning sufficient income to be a taxpayer. If the Canadian federal government were to pay this Refundable Disability Tax Credit, disabled people throughout the country would receive a total of $1.1 billion. This would compensate for expenses such as caregivers, medical bills, special equipment and devices to modify their lives for their disabilities, transportation to and from doctor’s appointments, etc.

The supporters of this proposed tax credit also want to ensure that the provinces would not be able to reduce the amount of money going to disadvantaged disabled persons through various fees and programs. They assert that there must be a concerted effort to coordinate between the provinces and the federal government to make sure the benefits would be going to those who need them the most to help pay for the goods and services they need to live their lives.

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