Disability Tax Credit Guide for Diabetes
Over the last few decades, diabetes has been on the rise in Canada and is now one of the most common chronic diseases in the country, affecting close to 2.5 million Canadians.
With the numbers of those who have diabetes growing, many Canadians face hefty bills attached to the disease, costing thousands of dollars each year, which they must pay out of pocket.
If you are reading this article, you or a family member may have diabetes and you are probably looking for information about the Disability Tax Credit (DTC) and how it can help Canadians suffering from diabetes.
We wrote this article to help diabetic Canadians better understand the Disability Tax Credit, whether they’re a Type 1 or Type 2 diabetic so that they can use the DTC and apply for it with confidence.
Among breaking down what the DTC is, if you’re eligible, and more, we will also be explaining the following:
- Does diabetes qualify for the Disability Tax Credit?
- How much money can you receive if found eligible for Disability Tax Credit?
- Am I automatically eligible for the Disability Tax Credit if I use an insulin pump?
- The difference between type 1 and type 2 when applying for the Disability Tax Credit
- Is life-sustaining therapy a marker for the Disability Tax Credit?
- Common reasons those with diabetes are denied for the Disability Tax Credit
We aim to cover all information related to Disability Tax Credit for diabetics but if you want to learn more about the DTC program, please check our comprehensive Disability Tax Credit guide, which has in-depth and up-to-date details about the program.
What is Diabetes, and Does it Qualify for the Disability Tax Credit?
Diabetes prevents the body from either not producing or correctly using insulin. Insulin is a hormone that controls the amount of glucose (sugar) in the blood. Diabetes leads to high blood sugar levels, which can damage organs, blood vessels and nerves. The body needs insulin to use sugar as an energy source.
There are two types of diabetes:
Does Type 1 Diabetes Qualify for the Disability Tax Credit?
Type 1 diabetes, also known as juvenile diabetes, occurs when the immune system mistakenly attacks and kills the pancreas’ beta cells. As a result, sugar builds up in the blood instead of being used as energy. No, or very little, insulin is released into the body and must be administered as needed, which takes a significant amount of time, money, effort to maintain. About five to 10 percent of people with diabetes have type 1 diabetes. Type 1 diabetes generally develops in childhood or adolescence but can grow in adulthood.
Type 1 diabetes requires consistent maintenance through things such as monitoring glucose levels, injecting insulin and more. If caring for the disease takes up to 14 hours per week to tend to, you will be eligible for the Disability Tax Credit.
Does Type 2 Diabetes Qualify for the Disability Tax Credit?
Type 2 diabetes occurs when the body can’t properly use the insulin released (called insulin insensitivity) or does not make enough insulin. As a result, sugar builds up in the blood instead of being used as energy. About 90 percent of people with diabetes have type 2 diabetes. Type 2 diabetes more often develops in adults, but children can be affected.
Unlike Type 1 diabetes, Type 2 doesn’t always require insulin administration, but it takes a significant amount of time, money, and effort to maintain when it is necessary. If caring for the disease takes up to 14 hours per week to tend to, you could be eligible for the Disability Tax Credit.
What is the Disability Tax Credit?
Created by the Canadian government and administered by the Canada Revenue Agency (CRA), the DTC is a non-refundable tax credit meant to assist working, tax-paying disabled Canadians with their medical expenses.
The Disability Tax Credit is a refund on federal income taxes paid by disabled Canadians or their supporters and was put in place to provide financial assistance for medication, medical treatments, and other expenses attached to an individual’s condition.
How Much Can you Receive from the Disability Tax Credit?:
If approved for the DTC for diabetes, you can receive one or more tax refunds, depending on how long you have lived with the condition. To find out how much you can stand to receive from the DTC, use our highly accurate Disability Tax Credit Calculator. However, to give a rough estimation, here is how much you could earn from the DTC:
The Disability Tax Credit consists of a Federal portion and a Provincial portion. The Federal portion is the same across Canada, while the Provincial portion is different in each Province.
If found eligible for the Disability Tax Credit, you could receive:
- Annual refund – If found eligible, you can claim a refund annually when you prepare your taxes. An adult can receive around $1,500-$2,000 per year, while a child’s caregiver can receive up to $4,000 per year.
- Retroactive One-time Refund – If you’ve been living with diabetes for years before your approval for the DTC, the CRA will evaluate your application to see when your symptoms started. If applicable for prior years, you could receive a one-time lump sum payment for up to the past ten years. If you or your supporter have been paying federal taxes during those years, you will receive up to $20,000, or up to $40,000 you’re under 18.
FIND OUT IF YOU ARE ELIGIBLE TO
RECEIVE THE DISABILITY TAX CREDIT!
Does Diabetes Count as a Disability in Canada?
While diabetes is one of the eligible conditions under the DTC, you will only be eligible for the tax refund if you spend an excessive amount of time maintaining the disease.
Due to its impact on activities of daily living (ADL) and the time spent maintaining the disease from constantly monitoring blood sugar levels to injecting insulin, the CRA considers diabetes a disability.
The CRA provides a tax refund to help offset the costs of insulin shots and lifestyle adaptations through the DTC, which is available to those with either Type 1 or Type 2 diabetes. However, your physical and mental health conditions may/will also be considered.
The CRA will look at many different factors when determining if an individual is eligible for the DTC. To be found eligible, you must:
- Be a Canadian citizen or permanent resident.
- Live with a prolonged impairment, marked restriction, two or more significant restrictions, or depend upon life-sustaining therapy.
- You or your supporter pay federal taxes.
What is Considered Life-Sustaining Therapy?
The activities required to maintain diabetes fall under life-sustaining therapy. However, to be found eligible for the DTC for diabetes, you must spend more than 14 hours a week maintaining or treating your diabetes. Some activities that fall under life-sustaining therapy are:
- Insulin therapy
- Monitoring glucose levels
- Preparing/administering insulin
- Calibrating necessary equipment
- Keeping data on pattern of diabetes
What is not counted under life-sustaining therapy:
- Monitoring carbohydrates
- Recovering from hypoglycemia or hyperglycemia
- Meal preparation
- The time it takes for the pump to deliver insulin
- Medical appointments
- Purchasing medication
Do Diabetics Automatically Qualify for Disability Tax Credit if They Use A Pump?
At one point, you were automatically eligible for the DTC if you used an insulin pump – however, as of 2004, the insulin delivery method no longer matters. As mentioned previously, what matters is the amount of time you spent injecting insulin or tending to your diabetes. Insulin pumps inject at all points of the day, so to be eligible for the DTC, the time you spend maintaining the pump must exceed more than 14 hours per week.
Did the CRA Reverse Type 1 Diabetes Eligibility for the Disability Tax Credit?
In 2017, the Canada Revenue Agency made a revision to the rules regarding life-sustaining therapy, resulting in those with type 1 diabetes being denied for the DTC.
Under the revised requirements, those who independently manage insulin therapy do not meet the 14-hour per week requirement unless they have other chronic conditions that affect the time needed to maintain their health. However, the decision was reversed only a year later, allowing those with type 1 diabetes to benefit from the tax refund.
How Do Diabetics Apply for the Disability Tax Credit?
Applying for the DTC is a simple process. HOWEVER, being approved for the tax refund can be challenging. You will need to provide substantial evidence that shows how much your diabetes is affecting your life and how much time you put into maintaining your insulin levels.
The Disability Tax Credit application process for diabetes is as follows:
- Download the T2201 Form from the CRA’s website.
- Print the T2201 and take it to your health care practitioner to fill out and sign.
- Your health care practitioner must check the “Does your patient meet the conditions for life-sustaining therapy as described above?” box as “yes.”
- Send the signed T2201 by mail to a CRA processing centre or even online.
- Wait about 1-3 months to hear back from the CRA if you were approved or not.
When applying for the DTC for diabetes, it is essential to provide as much evidence as possible to show your condition’s severity and the amount of time you spent treating your diabetes.
You can take some additional steps to improve the chances of your application’s approval. First, it is vital that you work with a medical practitioner familiar with the DTC and at what point diabetes becomes eligible for the tax refund. Also, complete as many medical assessments as possible to validate your diagnosis.
While applying independently can be quick and financially beneficial, you may want to seek out additional help from a specialized DTC firm, like Disability Credit Canada, for more complex cases or cases that have been denied.
What If I’m Sent A Second Form Regarding Time Spent?
If sent an additional form regarding your time spent tending to your diabetes, it is best to not only confirm that it takes 14 hours or more a week to maintain, but you should also elaborate further than you had on the initial form.
Here’s some examples of how to add up your time:
For injections, take into account the time it takes to:
- Clean the area where injection will go
- Clean and prep the vial
- Perform the injection
- Deal with clean up
Preparing and injecting insulin usually takes around 3.5 hours or a week.
For insulin pumpers, take into account the time it takes to:
- Change pump tubing and insulin cartridge
- Adjusting pump programming
- Establishing correction doses
- Changing pump battery
It usually takes 7 plus hours a week to maintain an insulin pump.
For logging, take into account the time it takes to:
- Analyzing trends
- Making adjustments
It would total 30 minutes per day, equating to 3.5 hours per week.
For checking blood glucose levels, take into account the time it takes to:
- Wash the area to be tested,
- Ensure meter is coded properly
- Insert the test strip
- Lance area
- Apply blood
- Record reading
This is usually done 8 times per day, taking around 3 minutes per test equating to 24 minutes per day or 3 hours per week.
How to Apply to the Disability Tax Credit for My Child with Diabetes?
As with adults, applying for a child for the Disability Tax Credit for diabetes comes down to the amount of time it takes to maintain the disease and its overall effect on the child’s ADLs.
However, if you are applying for the DTC for a child with diabetes, the time you and the child spent doing and supervising activities related to tending to their diabetes will both count towards the 14 plus hours a week required to make them eligible due to life-sustaining therapy.
Activities counted as supervising a child with Type 1 diabetes that can be as the 14 hours per week requirement include:
- Waking the child at night to test their blood glucose level
- Checking the child to decide if more blood glucose testing is needed
- Any other supervisory activities be considered necessary to adjust the dosage of insulin
An eligible child may receive one or both of the following refunds:
- Federal Tax Refund – If the impaired child’s parent or caregiver has paid into Federal income taxes, they will receive the same amount an adult claimant would.
- Child Disability Benefits – If the parent or caregiver has not paid into Federal income tax, they will only receive the Child Disability Benefits.
To learn more about the Child Disability Tax Credit, check out our in-depth guide.
Top Reasons Why Diabetics are Denied the Disability Tax Credit
As mentioned previously, applying for the DTC is a simple process. However, being approved for the tax refund can be challenging and will require ample evidence and understanding of the eligibility requirements.
Due to diabetes being a less visible condition, you will need a lot of documentation and assistance from a medical practitioner who understands your diabetes and the DTC.
We have noticed some trends related to applications being denied for the DTC over our many years of experience. While some reasons are clear-cut, others can be less easy to identify.
Some of the more common reasons for DTC applications being denied include:
- Missing or incomplete information about your time-spent tending to your diabetes on T2201 form
- Severity or time spent isn’t enough to make you eligible
- Lack of knowledge of DTC eligibility criteria
- Inconsistent medical diagnosis
- Diabetes has not been present long enough to make you eligible
- Cumulative effects of impairment not included
- Lack of supporting medical documents to prove the severity of your condition.
Even if you are denied, you are free to reapply as frequently as needed with no repercussions. When reapplying, be sure to add more information about time spent or the severity of your condition to your application to ensure your application’s approval.
What are Other Benefits & Programs Available to Those Who Have Diabetes?
If you live with diabetes, many other government programs can assist you with the added expenses brought on by diabetes.
Here are some of the other programs available to assist those living with diabetes:
- Canadian Pension Plan Disability Benefit is available to Canadians under 65 who have become unable to work because of a disability.
- Diabetes Education Centres provide diabetes education to people who are newly diagnosed and those who have had diabetes for many years.
- Canadian Diabetes Prevention Program provides those with prediabetes or are at high risk of developing type 2 diabetes with personalized programs, health coaches, education and more.
- Canadian Diabetes Educator Certification Board develops and administers a certification program for Certified Diabetes Educators in Canada who have extensive knowledge in diabetes care/management and education processes.
These are just a few essential support programs; there are many other programs available to help you and your loved ones with the added expenses brought on by diabetes.
Diabetes is not only debilitating, but it is also very costly in both time and money. Many believe that the government provides insulin to diabetics; however, this is not the case. Insulin is paid for by individuals suffering from this disease, so programs like the DTC are essential.
Building a solid case and correctly filling out the DTC application form is a must and requires a good amount of knowledge about eligibility criteria. If you would like your best chance at being approved for the tax refund, hiring a specialized DTC firm is the best way to do so.
Disability Credit Canada has worked on countless cases just like yours, so we know what information is required for your application. We will even assist you when filling out your application or appealing your case if it is denied.
We offer free assessments and work on a NO WIN – NO FEE basis, meaning we only get paid if you do and are incentivized to bring you the most out of your refund!
Call us today at 1-844-800-6020 for your best chance of approval for the Disability Tax Credit.