Common Misperceptions About the Ontario Disability Tax Credit

Millions of Canadians are out of work due to debilitating physical and mental conditions. While these people should be able to focus on getting healthy, the unfortunate fact is that life doesn’t stop when injury or illness strikes. Bills come due and daily expenses must be covered. If you are one of these people, you may need financial assistance like Disability tax credit and CPP disability.

If you live in Ontario, the Ontario Disability Tax Credit can help cover your daily costs. The credit comes in the form of a tax deduction added to your standard return, providing much-needed cash when tax returns are mailed out each spring. Depending on your situation, you can qualify for roughly $1,850 per year.

What People Have Wrong About the Ontario Disability Tax Credit

The disability tax credit has helped countless families across Canada. Unfortunately, other families fail to receive the benefits they need and deserve because of misinformation about the program. Here are some common mistakes people make regarding the Ontario disability tax credit:

• No Taxable Income, No Disability Tax Credit – The credit is a tax deduction, so you need to be a taxpayer to benefit, right? Wrong. If you’re disabled and don’t earn enough income to pay taxes, you can potentially transfer the tax credit to another individual, still getting your family the money it needs. If you have a relative who helps you with the “basic necessities of everyday life,” including personal care and/or financial support, that relative can receive the tax credit on your behalf. The vast majority of eligible disabled people in Canada can either receive the credit themselves or transfer it.
• You Can’t Claim a Tax Credit if You’re on the ODSP – The Ontario Disability Support Program (ODSP) is a program providing income and employment support to the long-term disabled, helping pay for things like rent, groceries, and heating bills. You may even be enrolled in the program yourself. Common sense says that ODSP recipients are not eligible for the tax credit, because their income is too low to have taxes payable. In most (but by no means all) cases, they indeed don’t owe taxes to the Revenue Service. However, like in the scenario above, if you receive assistance via the ODSP, you can still transfer your Canadian Disability Tax Credit to a relative. There is nothing on the books saying you can’t benefit from both programs simultaneously.
• The Revenue Service Denied My Application, So I’m not Eligible – Let’s say you’ve been disabled for two years with severe arthritis. Last year you applied for the Ontario Disability Tax Credit and were rejected. This year, you know you aren’t eligible, so you aren’t bothering to apply. You would be making a big mistake. The Disability Tax Credit application can be denied for a variety of reasons, ranging from incomplete paperwork to downright errors made by Revenue Service officials. You can always recheck your paperwork and reapply. Just because you were denied once doesn’t mean you aren’t eligible. Talk to an expert, they can help you determine your eligibility. And if you’re application is rejected, you can always appeal the decision. Statistics show that the majority of appeals result in decisions favorable to the applicant.
• The Disabled Are Automatically Eligible – It happens that people with conditions as serious as rheumatoid arthritis, cerebral palsy, autism, and multiple sclerosis are sometimes deemed ineligible by the Revenue Service. The reason is that eligibility is defined less by the condition itself than by the effect that it has on the applicant’s ability to work. The Revenue Service has strict criteria for defining a condition as severe (it must be proven by a doctor to significantly impair the applicant’s ability to perform basic tasks, or require sessions of “life-sustaining therapy” at least three times per week). You may have multiple sclerosis but still be able to perform basic functions, resulting in ineligibility. Many applicants make the mistake of failing to document their condition in detail because they think their disability automatically qualifies. The application process is bureaucratic and technical, so you should discuss your eligibility with a professional.
• The Tax Credit Isn’t for Me Because I’m Not Disabled – Many people don’t bother applying because they don’t consider their condition to be a “disability.” Even though things like heart disease, arthritis, and liver conditions aren’t called “disabilities” in the same sense that cerebral palsy is, they can be defined as such by the Revenue Service. As mentioned above, eligibility for the Ontario Disability Tax Credit is primarily about the effect the condition has on your life. If you’re physically or mentally unable to work, regardless of the diagnosis, you may still qualify. You would be doing yourself a disservice by not applying.
• You Can’t Receive the Tax Credit if You Get the RDSP– The Registered Disability Savings Plan (RDSP) allows Canadians with disabilities and a low-to-modest income, which unfortunately includes most ODSP recipients, to receive a $1,000 annual Disability Savings Bond. A new bond is provided every year until the beneficiary either receives the lifetime benefit maximum of $20,000 or reaches the age of 50. Because the RDSP is for low-to-modest income people, many of whom are on ODSP and don’t have taxes payable, many think that eligibility for it means that income must be too low for the Ontario Disability Tax Credit. Often that isn’t true. Discuss your situation with a professional before deciding you aren’t eligible.

If you are currently unable to work and want to get assistance for yourself and your family through the Ontario Disability Tax Credit program, you may be confused about your eligibility. The best advice would be to get in touch with an organization specializing in helping people receive disability benefits.

In Ontario, the best place to call is Disability Credit Canada. We’ve been in business for many years, providing expert advice to disabled Canadians as well as helping them fill out and submit the Disability Tax Credit application. Our expert staff can help ensure that you and your family get all the help you need.