DTC process

Feds announce public review on Disability Tax Credit

November 11, 2014

There was good news this week out of Ottawa. 

No, I’m not referring to the “Family Tax Cut”.  However, that announced partial income splitting for families with children under 18, the increase to the Universal Child Care Benefit, its extension to children between ages 6 and 18, the increased deduction limit for child care expenses and the Children’s Fitness Tax Credit are obviously good news for people with children under 18.

But the good news I refer to today is the announcement by the Minister of Revenue to open public consultations on the Disability Tax Credit (DTC) application process. 

The minister has a stated goal of, among other things, investigating, “…how we can simplify the disability tax credit process to better meet the needs of persons with disabilities and those who care for them.”

I think that’s marvellous, and I hope that people with experience and an interest in this area - especially persons with disabilities - will take the time to provide their input. 

This consulting process is in the context of a private member’s bill called, tellingly, the Disability Tax Credit Promoters Restrictions Act, and passed by Parliament earlier this year.

This Act has now received Royal Assent, making it law.  The next step is for the CRA to put into Regulation the maximum fee that consultants or “promoters” can charge to assist people with disabilities navigate their way through the complicated maze of the DTC application process.  CRA is also examining whether or not some promoters should be exempt from the new reporting requirements, a point which I admit that I don’t fully understand. 

A consultation document can be found at www.CRA.GC.ca/dtcconsultations and an online survey is also available on the CRA website.  This is a page-by-page explanation of each step of the DTC application process, followed by a box for input from you.

It’s a challenge, as it asks good questions like “How could the current form be improved?”

Specific recommendations will be the useful ones, but then that has you and me getting into the form designing business.  For my part, I am working on a better answer than, “make it understandable to qualified medical practitioners and to taxpayers.”  That will require me to pull out the current form T2201, review it in detail and determine all of the areas that are unintelligible to the people who need to understand it.

That brings us to the issue of consultants and what the government derisively calls “promoters”.  While there are no doubt some people who make a living by promoting the DTC application to folks with disabilities and charging them too much to help them, the vast majority of consultants I’ve met are honest, caring and involved in this business because they have had family or friends who could not successfully navigate the process of convincing qualified medical practitioners and CRA that they should be entitled to the DTC.

While some of these consultants recognized a business opportunity through their experience and exploited it, many others are more altruistically motivated.

Kudos to the government for making an effort to set a reasonable limit on such fees and for protecting the vulnerable, and kudos as well to CRA for engaging in an open public process to determine what fees are reasonable, and to hopefully improve the current complicated system.

Part of this process has to be increased education and awareness for medical practitioners, so that they understand that their patients need their help in applying for the DTC, and that people can be working full time and still be eligible for the DTC.

My recommendation is that if CRA is able to make this process simpler, more transparent and more user-friendly for persons with disabilities and their advocates, there will be less need and demand for consultants.  That change alone would automatically result in lower fees.

The CRA is also holding in-person consultations in Vancouver, Toronto, Montréal and Halifax over the next few months.  If you have something to contribute, please make your voice heard, online, by mail or in person.

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Dollars and Sense is meant as an introduction to this topic and should not in any way be construed as a replacement for personalized professional advice.

Please consult legal, tax and investment experts for advice on your unique situation.

David Christianson, BA, CFP, R.F.P., TEP, CIMis a financial planner and advisor with Christianson Wealth Advisors, a Vice President with National Bank Financial Wealth Management, and author of the book Managing the Bull, A No-Nonsense Guide to Personal Finance.