Chapter 2: Disability Tax Credit

The disability tax credit provides tax relief to individuals with severe impairments in function that restrict them in activities of daily living. It is also available to some who require extensive therapy to sustain a vital function. The credit is based on the assumption that these individuals likely incur a range of disability-related costs that they are not able to claim under the medical expense tax credit, such as expenses associated with transportation and housing. These are considered to be the so-called non-itemizable or hidden costs of disability, as we described in the previous chapter.

The purpose of the disability tax credit is to provide for greater tax equity by allowing some relief for disability costs, since these are an unavoidable additional expense not faced by other taxpayers. In effect, the disability tax credit provides tax relief for assumed non-itemizable costs of $6,486 (the credit amount for 2004), which translates to a reduction of federal income tax otherwise owing or payable of a maximum of $1,038 (16 percent of $6,486).¹ The credit therefore is intended to act as a tax fairness measure rather than a subsidy or support for persons with disabilities.²

More specifically, the disability tax credit is designed to achieve a degree of horizontal equity in the tax system. According to the principle of horizontal equity, individuals in similar circumstances (i.e., having similar amounts of disposable income before tax) should pay similar amounts of tax. Appendix 5 illustrates how the disability tax credit seeks to achieve this objective.

The disability tax credit, however, is very much a blunt instrument. It grants a flat credit, regardless of the actual costs of disability, to individuals who meet the eligibility criteria, and hence may afford too little relief to some and too much to others. To some extent, this limitation is inherent in any broadly based tax measure designed to provide special tax treatment for persons with disabilities. There are serious limitations, as we will discuss in the Future Directions chapter, in the ability of the tax system to give fully equitable relief in response to the special circumstances faced by persons with severe disabilities.

Individuals who do not benefit from the disability tax credit because of insufficient federal tax liability (due primarily to low income), but who are eligible on the basis of disability, may transfer all or part of the credit to a supporting person. This supporting person includes a spouse or common-law partner, or a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, nephew or niece of the individual.³

If the supporting person also has low income, that person may not benefit from such a transfer.

To be eligible for the disability tax credit, individuals must:

• have a severe and prolonged mental or physical impairment;

• as a result of that impairment, be markedly restricted all or substantially all of the time in their ability to perform a basic activity of daily living, or would be markedly restricted were it not for extensive therapy they receive to sustain a vital function; and

• file with the Canada Revenue Agency a form T2201, Disability Tax Credit Certificate, that has been completed by a qualified practitioner certifying that they meet the first two requirements.

For the purposes of the disability tax credit, ‘prolonged’ means that the impairment has lasted or is expected to last for a continuous period of at least 12 months. ‘Markedly restricted’ means that all or substantially all of the time, a person is blind or is unable, or requires an inordinate amount of time, to perform a basic activity of daily living, even with therapy and the use of appropriate devices and medication.

The Canada Revenue Agency informed us that it generally has interpreted the requirement ‘all or substantially all of the time’ to mean that the restrictions in activity are present 90 percent of the time or more. This interpretation is also applied to other sections of the Income Tax Act that use the phrase ‘all or substantially all of the time.’ It should be noted that the courts have indicated that a single mathematical test cannot be applied to the phrase ‘substantially all’ and, therefore, the 90 percent interpretation serves merely as a guideline.

In determining eligibility for the disability tax credit, the nature of the impairment, with the exception of blindness, is irrelevant. What is significant for the purposes of eligibility is the impact of the severe and prolonged impairment upon the ability to carry out one or more ‘basic activities of daily living.’ These activities are defined in the Income Tax Act as:

• perceiving, thinking and remembering;

• feeding or dressing oneself;

• speaking so as to be understood, in a quiet setting, by another person familiar with the individual;

• hearing so as to understand, in a quiet setting, another person familiar with the individual;

• eliminating (bladder or bowel functions); and

• walking.

Individuals with a severe and prolonged impairment need not be markedly restricted in a basic activity of daily living to be eligible for the disability tax credit, provided that they would be markedly restricted if they were not receiving therapy that:

• is essential to sustain a vital function;

• is required to be administered at least three times each week for a total duration averaging not less than 14 hours a week; and

• cannot reasonably be expected to be of significant benefit to persons who are not so impaired.

The 2003 version of form T2201, Disability Tax Credit Certificate, is attached as Appendix 6. All persons wishing to establish eligibility for the credit must have the form completed and certified by an appropriate qualified practitioner.

The number of disability tax credit self-claimants (i.e., those who claimed the disability tax credit for themselves) grew steadily from 1988 to 1994 (see Figure 2.1). This growth reflects the increased take-up of the credit following the expansion of eligibility in 1986. Prior to that time, the disability deduction (which predated the disability tax credit)⁴ was available only to those who were blind or confined to a bed or who used a wheelchair.

After 1994, the number of disability tax credit self-claims remained fairly stable at approximately 380,000, until 2001, the latest year for which final data are available, when self-claims dropped to about 344,000. The decrease is attributable partly to the 2001 review of disability tax credit claims initiated by the Canada Revenue Agency (discussed later in this chapter).

Source: Department of Finance

Many tax filers who claim the disability tax credit for themselves do not need the full credit to reduce their federal tax to zero. Some of these individuals transfer all or some portion of the credit to one or more supporting relatives. In 2001, about 75,000 Canadians claimed all or part of the disability tax credit as a transfer from a spouse, while 99,000 other supporting relatives claimed a transferred disability tax credit amount.

The total number of self-claims and transfers, however, does not reveal how many individuals are eligible for and claim the disability tax credit (or for whom a claim is made). The lack of clear data is due to the fact that two individuals, such as the person with a disability and the spouse, may each claim a portion of the credit.

The Department of Finance recently estimated that, in 2001, there were 400,000 Canadians eligible for the disability tax credit for whom a claim was made — either by the individuals themselves or a supporting spouse or relative, or both.⁵

The disability tax credit provided $330 million in federal tax relief to eligible individuals or their supporting relatives in 2001. This expenditure is a significant increase from previous years (see Figure 2.2),⁶ despite the drop in the number of self-claims.

The growth is due entirely to the increase in the credit amount from $4,293 to $6,000 in 2001. The Department of Finance projects that the amount of tax relief provided under the disability tax credit will rise to $375 million in 2004.

Figure 2.2: DTC Tax Expenditure, 1988-2001 (in millions of current dollars)

Source: Department of Finance

One of the notable features about self-claimants of the disability tax credit is their age: more than half are seniors (see Table 2.1).⁷ This has been the case since 1995 and the proportion of disability tax credit self-claimants who are age 65 or older has increased steadily in recent years (see Figure 2.3). Given that disability rates rise with age and that the proportion of seniors in the general population is growing, these figures are not surprising.⁸

Source: Department of Finance

Figure 2.3: Percentage of DTC Self-Claimants Who Are Seniors, 1988-2001

Source: Department of Finance

A research paper⁹ prepared for the Committee estimated that, as a result of the aging population, fully two-thirds of the disability tax credit recipients will be over 65 by 2031, with a near doubling of the total number of claimants by that date. This trend would lead to a doubling of the revenue cost of the disability tax credit in real terms (i.e., taking into account the effects of inflation). The result is that the disability tax credit increasingly will become a measure that provides tax relief to seniors, rather than to children and working age persons with disabilities. We explore this aspect of the disability tax credit in the Future Directions chapter.

Persons with disabilities have lower incomes on average, generally as a result of lower rates of employment. This problem is reflected in the income distribution of disability tax credit self-claimants (see Table 2.2). Three-quarters of disability tax credit self-claimants had a total income for tax purposes of less than $30,000 in 2001, while only 5 percent had income above $60,000.

Note: Total income refers to total income declared for tax purposes.

Source: Department of Finance

While this distribution is influenced by the high proportion of senior claimants, it is also worth noting that the average income of tax filers under age 65 who receive the disability tax credit is significantly lower than those not receiving it (see Table 2.3). For Canadians over age 65, the average recipient of the disability tax credit has about the same income as persons without disabilities.

In the case of seniors, one explanation for the fact that recipients of the disability tax credit have levels of income similar to those without disabilities is that a minimum income is provided to all seniors, regardless of disability, through Old Age Security and the Guaranteed Income Supplement. Another explanation is that because many seniors with a disability become functionally impaired only later in life, they are likely to have the same retirement incomes as those who do not become disabled (i.e., they had the same opportunities to work and save for retirement).

Age Average total income for Average total income

DTC self-claimants for others

Under 65 $20,881 $32,719

65 or older $27,062 $27,517

Note: Total income refers to total income declared for tax purposes.

Source: Department of Finance

The description of the disability tax credit sheds some light upon why this measure has been so difficult in its application. As noted, there are three components to the eligibility criteria: the presence of severe and prolonged impairment, its impact (a marked restriction) upon a basic activity of daily living and professional certification of the claim on a correctly completed form.

Various disability groups have expressed concerns for years about problems in the interpretation and application of the disability tax credit. But these issues came to the fore forcibly in 2001 when the Canada Revenue Agency¹⁰ decided to conduct a mass audit of this credit (see box on next page).

The disability community was outraged by the way the 2001 review had been communicated and its extensive scope. It was also concerned about major revisions made throughout the 1990s to the T2201 form, which it felt made the interpretation of the eligibility criteria increasingly restrictive in many areas.

While a number of submissions to the Committee referred to the 2001 Canada Revenue Agency review, they also identified a broader range of issues related to the disability tax credit. These concerns can be grouped into two categories.

The first set involves the legislative policy and the interpretive issues associated with eligibility for the disability tax credit. The Department of Finance and the Canada Revenue Agency are responsible for the policy and legislation, and the interpretive aspects of the credit, respectively.

The second cluster of concerns relates to the administrative aspects of the disability tax credit, including the T2201, the process by which decisions are made and communicated to applicants, the procedures in place at various stages for reviewing these decisions, and the general lack of information provided to claimants regarding the appeals process and access to documents. The Canada Revenue Agency is responsible for the administration of the disability tax credit.

Our recommendations on the disability tax credit attempt to address the major eligibility and administrative issues identified. As discussed in the previous chapter, the social model of disability was a key influence on our deliberations and we consider our recommendations as a first step towards eligibility criteria that reflect the social model.

Beginning in 1996, the Canada Revenue Agency adopted the administrative practice of reviewing all Disability Tax Credit Certificates (form T2201) for eligibility before assessing the tax return. This form of pre-qualification clearance is relatively unusual in the administration of the Income Tax Act. The Canada Revenue Agency has indicated that this practice has been adopted both to provide greater control over the granting of the credit and to avoid having to deny retroactively the claim to those who were granted it in error in previous years.

Because the Canada Revenue Agency lacked significant supporting information (and, in some cases, any information) on disability tax credit claimants who had first filed for the credit before 1996, the Agency decided in 2001 to seek better documentation of the claims from these 106,000 Canadian self-claimants.

It did so by asking these individuals to re-qualify for the credit by having a qualified practitioner complete a new T2201 form. The Canada Revenue Agency excluded from this review those over age 75, spousal claims and those who claimed on behalf of other relatives.

The letter created apprehension and anger among members of the disability community. It stated: "After reviewing your file, we have determined that we do not have enough information to continue to allow your claim for the 2001 and future tax years."

The letter did not make clear that the Agency needed to obtain for its files additional data to support the claim. Nor did the letter intend to imply that the Agency had information that would disqualify the identified individual for the credit, although this intent might be read into its words. An estimated 17,000 individuals who received the letter did not file a new T2201 form, and approximately 31,500 claims that were filed were denied for those who previously had been considered eligible for the credit.

Our discussions on the disability tax credit went beyond what we are recommending. Most notably, we debated extensively incorporating the social model in the eligibility criteria for the disability tax credit. While we do not make any formal recommendation on the issue, we believe that our work in this area has broader application and warrants further examination. We discuss this in the Future Directions chapter.

Submissions to the Committee raised several concerns related to the conceptualization of impairment. The current eligibility criteria, as set out in the Income Tax Act and the T2201 form, combine in one listing certain terms that pertain to human functions (e.g., speaking and hearing) and those that refer to activities (e.g., feeding or dressing). The result is that the present list of activities includes several human functions and, the Committee felt, a lack of clarity in the application of the criteria for the credit.

The terms hearing, speaking, eliminating, and perceiving, thinking and remembering all refer to functions necessary to carry out an activity. Activities, on the other hand, are purposeful and meaningful; they are intended to achieve a specific goal. A person must be able to learn, for example, in order to read and write. Feeding and dressing, by contrast, are activities that depend on several different physical and mental functions.

The failure to distinguish between functions and activities, and the resulting lack of clarity, have given rise, in our view, to confusion over the interpretation of a key eligibility criterion: a marked restriction in a basic activity of daily living. The Committee employed in our own deliberations a more rigorous conceptual distinction between human functions and basic activities of daily living, which we discuss further in Chapter 5.

As in the current disability tax credit, we agree that eligibility should require the presence of severe and prolonged impairment in physical or mental functions. This impairment, in turn, must give rise to a marked restriction in activity. While impairment in function is a necessary condition, its mere presence does not necessarily create a restriction in activity.

The Committee recommends that:

This recommendation is for clarification purposes and does not involve any revenue cost. It is not intended to alter the scope of eligibility for the credit.

Currently, eligibility for the disability tax credit of persons with an impairment in mental functions is recognized in the Income Tax Act through the term ‘perceiving, thinking and remembering,’ which is listed as basic activities of daily living. However, the Committee believes that the provisions of the Act were drafted at a time when the emphasis in respect of disabilities focused primarily upon physical disabilities, and impairments in mental functions were not as well recognized or understood.

Submissions to the Committee pointed out that persons with impairments in mental functions are at a disadvantage in eligibility determination because the symptoms and their associated impact have not been as well understood as impairments in physical functions. We were told that persons with intellectual impairments, learning disabilities and mood disorders generally have found it difficult in the past to qualify for the disability tax credit, even when their impairments have markedly restricted their activities of daily living.

In its submission to us, for example, the Coalition for Disability Tax Credit Reform quoted from testimony at the hearings held by the Sub-Committee on the Status of Persons with Disabilities: "From our experience, 100 percent of the new applications for [the disability tax credit] with people with schizophrenia have been rejected. Similar inconsistencies have been noted with respect to individuals with intellectual impairments."¹¹

In addition, the Ontario Brain Injury Association noted that, in the absence of qualifying adverbs, the use of the term ‘perceiving, thinking and remembering’ created problems in application. Almost every human can perceive, think or remember to some degree. The simple presence of these functions provides no suitable threshold for eligibility determination.

Another problem is that the phrase ‘perceiving, thinking and remembering’ does not capture the full range of mental functions. For example, it conspicuously omits serious mood disorders. While some persons with a marked restriction in activity arising from a mental impairment qualify for the disability tax credit, others do not. Similar inconsistencies have been noted with respect to individuals with intellectual impairments.

Concerns regarding the eligibility of persons with learning disabilities were also brought to our attention. This form of disability is generally not well understood. It is entirely possible for a person to be of average or high intelligence and still have a severe learning disability that markedly restricts a basic activity of daily living.

In our view, learning is a critical dimension of thinking. In fact, the ability to learn involves several mental functions — namely, the ability to concentrate, perceive, remember and solve problems. The Committee believes that individuals with mood disorders and learning disabilities should be eligible for the disability tax credit in the same way as individuals with other impairments in mental functions.

Many of the eligibility concerns raised by the disability community and the House of Commons Standing Committee on Human Resources Development and the Status of Persons with Disabilities were not necessarily tied to the legislative wording of the eligibility criteria, but rather to how those criteria were interpreted and presented on form T2201 (see Appendix 6). The Canada Revenue Agency substantially revised the T2201 form for the 2003 tax year based on extensive consultations and focus-testing held during the summer of 2003 (see box on next page).

The revised form represents a substantial improvement over its predecessors — it indicates a better understanding of mental disability and should address many of the concerns raised with respect to the disability tax credit. There is room, however, for continued improvement in the form and for further consultation by the Canada Revenue Agency with the disability community.

The Committee believes that the term ‘mental functions necessary for everyday life,’ which is now being used on the T2201 form, is a clearer description of the effects of mental impairments. We propose that this terminology replace the term ‘perceiving, thinking and remembering’ in the current legislation.

In 2003, the Canada Revenue Agency held a major consultation over the course of five months with 22 organizations representing the disability community and health professionals that covered all aspects of the T2201 form.¹² The discussion proceeded on the basis that any change to the form required consensus and had to be consistent with the legislation. The resulting draft form was then focus-tested with qualified practitioners to determine whether the new form would be clear and easy to use.

The primary concern with the old form was that it simply asked the qualified practitioner completing the form a series of ‘yes-no’ questions with little scope to provide further supporting information regarding the effects of the individual’s condition. As a result, this practice required the Agency to seek further clarification from a qualified practitioner when, if more detail had been provided on the form, further clarification would have been unnecessary. (In 2001, more than 40,000 clarification letters were sent to qualified practitioners.) Persons with impairments in mental functions were primarily affected. There were also concerns about whether the wording on the form was consistent with the criteria set out in the legislation.

As a result of the consultations, the T2201 form has been expanded to provide more information about the eligibility criteria. For most of the basic activities of daily living, the form first provides the legislative criteria, followed by information on how the criteria are interpreted and illustrative examples of what constitutes a marked restriction in that basic activity of daily living. Qualified practitioners are also invited to describe the effects of the impairment on the ability to perform a basic activity of daily living.

The most significant change in the T2201 form was the description of a marked restriction in perceiving, thinking and remembering. The form describes a marked restriction as being unable, or requiring an inordinate amount of time, to perform the mental functions necessary for everyday life, even with appropriate therapy, medication and devices. It then defines these mental functions as including memory, problem solving, goal setting and judgment, and adaptive functioning (e.g., abilities related to self-care, health and safety, social skills and common, simple transactions), and includes examples of each mental function.

The Committee recommends that:

This recommendation is for clarification purposes and does not involve any revenue cost. It is not intended to alter the scope of eligibility for the credit.

As noted, the eligibility requirement that a marked restriction must be present ‘all or substantially all of the time’ generally has been interpreted by the Canada Revenue Agency to mean that the symptoms that restrict activity are present 90 percent of the time or more.

The House of Commons Standing Committee on Human Resources Development and the Status of Persons with Disabilities had difficulty with this interpretation, arguing that it is too restrictive. In its December 2002 report, the Standing Committee noted that: "An individual who, for example, is unable to perform a basic activity of daily living 75 percent of the time is markedly restricted in this aspect of daily living."¹³

Our Committee discussed the use of the term ‘all or substantially all’ and its interpretation by the Canada Revenue Agency as the presence of symptoms that restrict activity 90 percent of the time or more. While we recognize that this 90 percent interpretation may work well for other tax measures that use the phrase ‘all or substantially all,’ there is a question as to whether this interpretation lends itself well to the disability tax credit, where eligibility needs to be determined in light of individual circumstances.

We considered the possible use of the term ‘significant’ instead of ‘all or substantially all,’ as it is less restrictive and more meaningful for health practitioners who complete the T2201 form. The term ‘significant’ would expand eligibility for the disability tax credit.

Even though use of the term ‘significant’ may be more meaningful for some, we could not reach consensus as to whether such a change would make the disability tax credit more fair. We discuss this issue further in Chapter 5.

Submissions to the Committee also pointed out that the current ‘90 percent rule’ has created problems related to conditions with episodic manifestations. If the rule is interpreted to mean that symptoms of severe impairment must be present all or substantially all of the time, then individuals with conditions with intermittent symptoms could be disqualified from eligibility for the credit.

The Multiple Sclerosis Society pointed out in its submission to the Committee, for example, how its members may be affected by this interpretation. Multiple sclerosis is a disabling disease of the central nervous system. It often causes severe disablement — frequently intermittent — in the form of tremors, problems with balance, severe fatigue, cognitive impairment and paralysis.

Once diagnosed, individuals must cope with the disease for the rest of their lives. But the condition is unpredictable in terms of how it affects daily living and how it progresses over time. Periods of spontaneous recovery may be interrupted by erratic disabling attacks. The result can be a permanent restriction in activities even though the symptoms are not always present; individuals cannot undertake some activity where a sudden onset of symptoms could pose a danger to themselves or others.

Similarly, the Canadian AIDS Society noted in its submission that persons with HIV experience recurring and unpredictable periods of good health and poor health despite having an illness that is permanent.

Many disabilities related to mental function, such as schizophrenia, brain injury and learning disabilities, can represent severe and prolonged impairments in mental functions — as the eligibility criteria for the disability tax credit require. However, many applications involving these impairments have been rejected for eligibility. While the condition is continuous, some of the disabling symptoms may not be present all of the time.

Persons with bipolar disorder, for example, may not be continually depressed or psychotic. Alternatively, or in addition, their depression or disordered thinking might vary in intensity. Even when less or not depressed, their judgment and problem-solving ability may be impaired and restrict their functioning. The unpredictable expression and resurgence of symptoms requires careful life management, which typically means that these individuals can be markedly restricted in their ability to carry out a basic activity all or substantially all of the time.

In our view, a marked restriction means that even with therapy, medication and/or devices, relative to someone of similar chronological age and for a substantial amount of time, an individual cannot independently perform one or more basic activities of daily living or requires an inordinate amount of time to carry out independently such activities.

A severe and prolonged impairment with continuously expressed symptoms (e.g., blindness or paraplegia) can lead to a marked restriction in activity (e.g., sight, walking) and a severe and prolonged impairment with intermittent symptoms of varying intensity (e.g., schizophrenia or dementia) can lead to a marked restriction in activity (e.g., mental functions). The Committee believes that individuals with both types of symptoms can be eligible for the disability tax credit under a proper interpretation of the present legislation and that this view is consistent with the wording on the current form, although this interpretation should be clarified further.

The Committee recommends that:

This action is not intended to alter the legislative requirement that a marked restriction in a basic activity of daily living be present ‘all or substantially all of the time.’ This recommendation should not involve any revenue cost.

For the purposes of the disability tax credit, the assessment of a marked restriction requires qualified practitioners to make judgments about the effects of severe and prolonged impairment in function upon the ability to carry out a basic activity of daily living. In making this assessment, they should take into consideration the relevant context.

Two people with the same diagnosis or impairment may not be restricted in activity in precisely the same way. Their restrictions result from their impairment within the context of individual factors and societal factors, such as access to disability supports or the extent of accommodation.

Individuals with significant pain and reduced strength in their upper limbs may be markedly restricted in their ability to feed themselves because they require an inordinate amount of time to do so.

Individuals with schizophrenia, a mood disorder or an anxiety disorder may be markedly restricted because they are unable, or require an inordinate amount of time, to independently solve a problem, make appropriate judgments or manage activity like self-care.

Adults with an intellectual disability may be markedly restricted, compared with same-age peers who have no impairment in mental function, because they are unable, or require an inordinate amount of time, to independently manage or carry out some activities of daily living.

Children with profound developmental disorder may be markedly restricted, compared with same-age peers who have no impairment in mental function, because they are unable, or require an inordinate amount of time, to independently make judgments and decisions necessary for self-care. For example, they might engage in self-injurious behaviour or might be unable to judge that a stove is hot or that a car is oncoming.

In some cases, one or more severe and prolonged impairments may result in the significant restriction of more than one basic activity of daily living without the individual being markedly restricted in any one of such basic activities all or substantially all of the time. The House of Commons Standing Committee on Human Resources Development and the Status of Persons with Disabilities also suggested that it might be appropriate for a person who is restricted in more than one basic activity of daily living, but not all or substantially all of the time in any one of these activities, to be considered eligible for the disability tax credit because of the cumulative impact of such restrictions.¹⁴

There are many circumstances in which individuals are restricted in carrying out two or more basic activities of daily living. However, in cases where these individuals are not markedly restricted in carrying out any single activity, they are not currently eligible for the disability tax credit. This is true even if the cumulative effects of the individuals’ restrictions are equivalent to the effects of having a marked restriction in a single activity all or substantially all of the time.

The Committee felt strongly that fairness requires that taxpayers who face these cumulative restrictions in their ability to carry out basic activities of daily living that are equivalent to the effects of having a marked restriction in a single activity all or substantially all of the time should also qualify for the disability tax credit. For example, individuals with multiple sclerosis who experience fatigue, depressed mood and balance problems may not be markedly restricted in a single activity of daily living such as walking. However, the combination of symptoms may create a marked restriction because several activities like walking, dressing and mental functions are affected, even if each single activity is not markedly restricted.

The Committee recommends that:

This recommendation is estimated to involve a revenue cost of approximately $50 million annually.

It is important to note that this recommendation does not alter the requirement that the impairment be severe and prolonged. Persons with multiple impairments, none of which is severe and prolonged or the effects of which are not present all or substantially all of the time, will not qualify for the disability tax credit.

The Committee feels that this recommendation is consistent with the unanimous vote in the House of Commons on November 20, 2002, which called upon the government to level the playing field for Canadians with disabilities and incorporate in a more humane and compassionate manner the real-life circumstances of persons with disabilities in eligibility criteria for the disability tax credit.

As noted, individuals who would be markedly restricted in a basic activity of daily living if they did not receive life-sustaining therapy are eligible for the disability tax credit.

This provision dates from the 2000 federal budget. The purpose of this provision was to extend the disability tax credit only to situations in which the amount of time dedicated to the therapy significantly restricted the individual’s ability to undertake normal, everyday activities. The legislation requires that the therapy be administered at least three times per week and that individuals spend, on average, 14 hours per week — the equivalent of two hours each day — receiving life-sustaining therapy in order to qualify for the disability tax credit. However, the term ‘therapy’ is not defined in the Income Tax Act and there are questions as to what might be included in the time taken to receive such therapy.

There are individuals with severe conditions who require considerable time to receive therapy who may not be eligible for the disability tax credit, given the Canada Revenue Agency’s interpretation of therapy. In particular, several submissions to the Committee raised the issue of the application of the life-sustaining therapy provisions to children with Type 1 diabetes mellitus (or insulin-dependent diabetes).

For Type 1 diabetics, life-sustaining therapy currently is considered to be insulin injection. A number of other ancillary activities, such as monitoring blood sugar levels, are not deemed by the Canada Revenue Agency to comprise the administration of the therapy and therefore are not counted toward the three-times-per-week and 14-hour-per-week requirements.

Insulin can be delivered either by means of multiple daily injections or by continuous infusion through an insulin pump. At the present time, individuals using a continuous infusion pump qualify for the disability tax credit if this mode of insulin administration is a medical necessity.

In addition, the Committee noted that there are recent decisions of the Tax Court of Canada in which judges have interpreted therapy to include some ancillary activities in determining that a child with Type 1 diabetes was eligible for the disability tax credit. These Court decisions have recognized that some children with Type 1 diabetes, because of the time devoted to their therapy, are not able to participate in everyday activities to the same extent and in the same manner as others who do not require life-sustaining therapy.

The Committee believes that the principles in these Court decisions should guide the government in developing any required policy and administrative changes regarding life-sustaining therapy. The Canada Revenue Agency could issue an interpretation bulletin, for example, indicating that life-sustaining therapy includes activities, such as monitoring of blood sugar levels and determining insulin dosages, as indicated in recent Tax Court decisions.

The concerns of parents caring for a child with Type 1 diabetes raise a broader issue: Is the disability tax credit the right vehicle to address the challenges these families face? We discuss the limitations of the tax system further in Chapter 5, Future Directions.

The Committee recommends that:

The revenue cost of this recommendation will ultimately depend on the nature of the changes implemented by the government.

The Income Tax Act and the T2201 form set out a list of qualified practitioners who currently may certify the presence of a marked restriction in a basic activity of daily living or the receipt of life-sustaining therapy. The list includes medical doctors (all activities), optometrists (vision), audiologists (hearing), occupational therapists (walking, feeding and dressing), psychologists (perceiving, thinking and remembering) and speech language pathologists (speaking).¹⁵

The Canadian Physiotherapy Association, in its submission to the Committee, asked that physiotherapists be added to the list of qualified practitioners authorized to certify walking or mobility impairments. The Association explained that physiotherapy is a primary care, self-regulated health profession committed to client-centred services. It also stated that the addition of physiotherapists to the list of qualified practitioners who can certify walking or mobility impairments would provide Canadians with an alternate accessible and reliable resource for certification of their eligibility for the disability tax credit.

Another key issue raised in submissions was access to qualified practitioners in remote and northern communities.

Nurse practitioners act as the primary delivery agents of health care in remote, rural and northern regions of the country. The Committee recognizes that the provision of health care throughout the country is evolving increasingly into various forms of collaborative practice in which nurse practitioners play a central role within a team of health professionals. However, the Committee was informed that there is no consistent definition of the role of nurse practitioners across the country and that more work would be required to determine under what circumstances nurse practitioners should be allowed to certify eligibility for the disability tax credit.

The Committee recommends that:

This recommendation does not involve any revenue cost.

Submissions to the Committee raised a wide range of concerns regarding the administration of the disability tax credit. Many of these concerns relate to the fact that the disability tax credit is more complex to administer than a number of other personal income tax provisions.

Taxpayers qualify for the age credit, for example, when they turn 65. Eligibility for the Canada Child Tax Benefit is determined by two clear factors: number of children up to and including age 18 and level of household net income. While the medical expense tax credit has its own complexities, it basically allows only certain defined medically necessary or disability-related items to be claimed, all of which must be backed up by a receipt.

However, the eligibility criteria for the disability tax credit involve a determination about a relatively subjective state — a marked restriction in a basic activity of daily living.

When the Canada Revenue Agency receives a T2201 form, Agency staff first verify that the form has been completely filled out as required. If not, it is sent back to the individual for completion.

If the form is complete, staff of the Canada Revenue Agency then review the form to see if it clearly indicates whether or not the individual meets the disability tax credit eligibility criteria. This determination may involve referral to medical advisory staff at Agency headquarters. If the form does not make a clear case for eligibility, the Canada Revenue Agency will seek clarification from the qualified practitioner who filled out the form. Once the Agency has clear information, it makes a determination as to whether the individual is eligible for the disability tax credit on either a temporary or indeterminate basis.

Applicants denied the disability tax credit who are dissatisfied with the decision or have additional information regarding their application may contact the Canada Revenue Agency and ask to have a second review carried out of the decision in their case. Under this process, a different staff member reviews the claim and either confirms or reverses the initial determination. While this second review process would appear to be available on request, unfortunately taxpayers are not automatically told of its existence, and hence may not have the opportunity to take advantage of this further step in the review process. To ensure fairness, the Canada Revenue Agency must ensure that taxpayers are fully informed of the availability of a second review of their disability tax credit claim.

If the claim is denied, the claimant may choose to file a Notice of Objection, which is the formal means of informing the Canada Revenue Agency that the claimant disagrees with its decision. The Appeals Branch of the Canada Revenue Agency then reviews the claim and either reassesses in favour of the individual or confirms the earlier denial. Claimants who wish to pursue the matter further in the event that the claim is still denied may appeal the decision to the Tax Court of Canada. Both the claimant and the Canada Revenue Agency can appeal an unfavourable decision of the Tax Court to the Federal Court of Appeal.

This section presents only the highlights of the concerns brought to our attention regarding this administrative process. These relate to the T2201 form itself, the clarification letters sent to qualified practitioners, the failure to give detailed reasons for rejection of an application and the process for resolving objections by persons with disabilities to the Canada Revenue Agency’s determination of their eligibility for the disability tax credit.

The Committee learned, for example, that there were inconsistencies in the way that disability tax credit claims were adjudicated. We were told that Canada Revenue Agency staff may have made judgments about medical issues without obtaining additional or any medical evidence. Further, some persons who had a qualified practitioner certify their marked restriction have been denied the disability tax credit without being provided any details about the refusal other than a standard and very general explanation.

This problem was pointed out to us by the Coalition for Disability Tax Credit Reform, which expressed concern in its submission about the lack of specific reasons for refusing a disability tax credit claim. Without these details, applicants are at a serious disadvantage if they wish to file a Notice of Objection.

The Committee notes that the Canada Revenue Agency is currently reviewing the content of the letters it sends to individuals whose claims have been denied, using the same consultative process with the disability community that was used for the revisions to the T2201 form.

In addition, many applicants and qualified practitioners believe that a physician or other health professional at the Canada Revenue Agency adjudicates the claims or reviews the additional information provided by the qualified practitioner. Indeed, this generally is not the case. With this background, a significant number of applicants may choose not to object to the decision. They are not likely to file a Notice of Objection indicating their intent to question the decision.

Concerns about the reliability of the assessment are reinforced by the rate of reversal in decisions arising from a Notice of Objection filing. From 1996—97 to 2002—03 fiscal years, close to 50 percent of the 15,000 Notices of Objection relating to the disability tax credit filed with the Appeals Branch of the Canada Revenue Agency were reassessed in favour of the taxpayer. When reassessing a claim, the Appeals Branch may take into account new information provided by the taxpayer, such as an updated T2201 form.

Many of these issues relate to the period prior to the 2003 consultations and the efforts made by the Canada Revenue Agency to improve its administrative practices.

Indeed, the Agency recently has improved its processes relating to the disability tax credit, in several cases by following more carefully its own stated procedures and guidelines, which are outlined in Taxation Operations Manuals.

Concerns have been raised as to whether Canada Revenue Agency staff have always followed the guidelines on disability-related tax measures outlined in these manuals. Further questions have been asked about whether persons with disabilities can obtain accurate information about disability-related tax measures from general Canada Revenue Agency staff.

The challenge for the Canada Revenue Agency is to ensure more consistent and appropriate implementation of its procedures. Improved training of staff and adherence to policies and procedures when adjudicating claims should address many of the identified problems. Ideally, these practices will also reduce the number of appeals of eligibility decisions.

The Committee recommends that:

Elements of this recommendation that are consistent with current practice do not involve any revenue cost. The Committee estimates that about $2 million annually will be required to implement the components of this recommendation that represent new initiatives.

As noted, the Income Tax Act and Canada Revenue Agency guidelines require applicants for the disability tax credit to complete a form known as the Disability Tax Credit Certificate, commonly referred to as the T2201 form. Over the past decade, the T2201 form has been modified several times — resulting in a generally more stringent interpretation of the ‘marked restriction’ criterion. However, the latest version of the T2201, issued for the 2003 tax year, is clearer and easier to follow and reflects more closely, in our view, the intent of the Income Tax Act.

The Committee supports the process used to arrive at the current form. We want to ensure the continuation of the progress achieved through this widespread consultation and review. In order to track the impact of the changes, the Committee proposes that the Canada Revenue Agency carry out focus-testing beyond those groups involved in the initial discussions to determine whether the revised form reflects its broader intent and is easier to use. The focus tests should determine the satisfaction level with the new form among qualified practitioners and taxpayers who have used it in the current year.

In addition to this feedback, the Canada Revenue Agency should institute better procedures for providing annual detailed statistics on the number of claims and their disposition, including data on the status of accepted claims over a lengthy time period. This tracking should involve the preparation of a profile of eligible disability tax credit claimants and the impact of the revised form. Further, it would be useful to have some data on claims processing broken down by relevant basic activity of daily living.

This information should be available as part of the ongoing consultation process so that the disability community can better understand and review the actual administration of the credit.

The Committee recommends that:

This recommendation is largely consistent with current practice and would involve only minor costs.

Several problems were also brought to our attention regarding clarification letters sent by the Canada Revenue Agency to qualified practitioners requesting additional information about their clients. Many questions in the clarification letters are too general and are not always relevant to the specific disability of the individual.

The Canada Revenue Agency has a practice of sending to the claimant a copy of the clarification letter it is sending to the qualified practitioner. The purpose of this practice is to provide the claimant the opportunity to discuss the issues with the qualified practitioner. The Committee encourages the Agency to continue this practice.

The Committee recommends that:

This recommendation does not involve any additional cost.

Not surprisingly, many applicants are confused when their claim is rejected. Most expect a positive result when a qualified practitioner has certified their claim (and perhaps even received payment to complete the T2201 form and the clarification letters).

Many individuals with disabilities are often too intimidated or discouraged to challenge the refusal of their claim for a disability tax credit. Persons with a serious impairment in mental functions, in particular, do not always have the capacity or stamina to file an objection.

On paper, exemplary procedures are in place to ensure transparency, fairness and respectful treatment of applicants whose claim has been denied. While these procedures are set out in the Canada Revenue Agency publication Appeals Renewal Initiative and the pamphlet Resolving Your Dispute — A more open, transparent process, many persons with disabilities may not understand their rights and the recourse process (objection and appeal) open to them. These individuals may not know they have the right to access documents in their file, as identified in the pamphlet.

The Canada Revenue Agency already has good principles and processes in place to deal with taxpayers who wish to dispute its decisions. But the principles sometimes fail to be put into practice.

The Committee recommends that:

This recommendation should involve only minor incremental costs.

As part of its efforts to create a general transparent redress mechanism, the Canada Revenue Agency launched an Appeals Renewal Initiative in December 1997. The purpose of the initiative was to inform Canadians about the Agency’s internal dispute resolution service.

The Canada Revenue Agency has recently re-established an Appeals Advisory Committee and the Agency has informed us that it intends to have representation from the disability community on this committee. We strongly support the need for such a mechanism to monitor the effectiveness of the Canada Revenue Agency’s internal review procedures.

Even after exhausting the objection process, taxpayers who are still dissatisfied with the decision regarding their case can appeal to the Tax Court of Canada. While the Tax Court will always be available as an option, ideally it should be used only as a last resort after other methods of dispute resolution have been tried.

Appealing a disability tax credit claim to Tax Court can be an intimidating and expensive process for many taxpayers. Yet the disability tax credit is worth a relatively modest amount of money compared with other programs for persons with disabilities — a maximum $1,038 in federal tax savings for 2004.

The majority of persons with disabilities who might wish to appeal to the Tax Court cannot afford the costs involved in an appeal. Further, appealing a case to the Tax Court may not be a practical solution for persons with disabilities since it may not be readily accessible, for example, to many individuals who live in northern or rural communities, especially when the disability prohibits travel.

There may be alternative and informal dispute resolution processes that can be a practical means of resolving tax disputes without relying on costly and time-consuming litigation. The Committee explored the possibility of applying one specific alternative method, known as ‘mediation,’ to disputes related to the disability tax credit in particular.

Mediation is a collaborative approach, which typically involves lower cost and less stress than going to court. While we support the need for more cooperative processes for resolving disputes, the Committee agreed that mediation was likely not the best approach for the disability tax credit, which involves a ‘yes’ or ‘no’ decision rather than a negotiated compromise.

We propose, instead, the creation of some form of alternative dispute resolution process that would be available after a decision by the Appeals Branch to deny the disability tax credit claim and confirm a negative Notice of Assessment. This proposed alternative dispute resolution process would not require formal rules of evidence or procedure. It may not be necessary, for example, for a hearing to be held in every case: issues might be dealt with by correspondence or telephone.

The Committee recommends that:

This pilot project is estimated to cost $4 million over one to two years. Ongoing costs would depend on the results of this pilot project.

The process we are suggesting would not — nor is it intended to — duplicate the procedures in place when appealing to the Tax Court. This process should be much more informal in terms of its structure, access, procedures and other features. The taxpayer would likely not incur significant costs with this alternative dispute resolution process.

Our suggestion is for an independent arbitrator who would hear from both the claimant and the Canada Revenue Agency and would then recommend whether the disability tax credit claim should be allowed or denied. Arbitrators should be legal or tax professionals, such as tax practitioners or law professors, who would be expected to apply the provisions of the Income Tax Act in making their decisions. The Canada Revenue Agency would appoint the arbitrators from a list, which could be drawn up by the Agency and the proposed advisory committee on disability and taxation (see Recommendation 2.12).

The recommendation of the arbitrator would not be binding on the Canada Revenue Agency or the taxpayer. The Canada Revenue Agency could still deny the disability tax credit and appeals to the Tax Court would continue to be available to the taxpayer. It is expected, however, that relatively few cases would be taken to the Tax Court after a decision arising from this process.

Our Committee has made several recommendations to improve the administration of the disability tax credit. Our final recommendation in that respect is to form a consultative committee to oversee the implementation and monitoring of our previous recommendations.

The Committee recommends that:

This recommendation should involve only minor costs.

A key question that the Committee addressed is whether Canadians who are potentially eligible for the disability tax credit actually receive it. Because the disability tax credit is available only to those with a severe and prolonged impairment that markedly restricts their ability to perform a basic activity of daily living, it is claimed by a relatively small proportion of persons who might be identified as having some form of disability.

In its evaluation of the disability tax credit, the Department of Finance determined that the disability tax credit appears to be reaching its target population. Using data from the Participation and Activity Limitation Survey and the National Population Health Survey, the Department calculated that the potential disability tax credit-recipient population was between 306,000 and 473,000.

As noted, the Department of Finance estimated using tax data that claims were made by or on behalf of approximately 400,000 individuals with severe and prolonged impairments in 2001. This estimate excludes some potential recipients of the disability tax credit who are better off foregoing the disability tax credit and including all of their attendant care or nursing home expenses in their medical expense tax credit claim (an estimated 22,000).¹⁶ Adding these individuals leads to an estimate of potential disability tax credit recipients of 422,000. This number is well within the range estimated using data from the two surveys.

Despite these figures, data from the Participation and Activity Limitation Survey indicate that, in the 2000 tax year, a significant proportion of the individuals covered in the survey either were unaware of the credit or did not know whether they had claimed the credit.¹⁷

A related issue frequently raised in submissions to the Committee was the argument that individuals who receive disability benefits under the Canada Pension Plan (CPP) should also be eligible for the disability tax credit.¹⁸ Having gone through the process of qualifying for CPP disability benefits, many groups felt that these individuals should automatically receive the disability tax credit.

More specifically, these groups felt that it should not be necessary to fill out separate forms for the Canada Pension Plan as well as the disability tax credit. In fact, the Coalition for Disability Tax Credit Reform proposed a simplification of the application process for both programs as a preliminary step in their harmonization. Tax return data show that only a fraction of CPP disability beneficiaries receive the disability tax credit. In 2001, an estimated 24 percent of those individuals made a self-claim for the disability tax credit, meaning that about 220,000 of them did not claim the disability tax credit.¹⁹

Why is such a small proportion of Canada Pension Plan disability beneficiaries benefiting from the disability tax credit? One key reason is that the disability tax credit and CPP disability benefits have different purposes. The disability tax credit recognizes the effect of a severe and prolonged disability on an individual’s ability to pay tax because of disability-related costs. Canada Pension Plan disability benefits provide income replacement for individuals who are unable to continue working as a result of a prolonged disability.

This difference in objectives leads to distinct eligibility criteria. Under the disability tax credit, applicants must be markedly restricted all or substantially all of the time in their ability to perform a basic activity of daily living, even with the use of aids, medication or therapy. By contrast, workers may be eligible for CPP disability benefits if they are incapable of regularly pursuing any substantially gainful occupation due to a severe and prolonged disability, and regardless of whether they have a severe and prolonged impairment resulting in a marked restriction in a basic activity of daily living.

As a result, some individuals who qualify for the disability tax credit may not be eligible for Canada Pension Plan disability benefits and vice versa. For example, persons who use a wheelchair may qualify for the disability tax credit, but would not be eligible for CPP disability benefits if they were able to work. (There is a large group of disability tax credit recipients who do not qualify for CPP disability benefits because they do not have sufficient history in the workforce, or because they are over age 65, which is when CPP disability benefits convert to CPP retirement benefits.)

Despite these explanations, the Committee still considered the proportion of Canada Pension Plan disability beneficiaries who make a disability tax credit claim to be unusually low, even taking into account the different eligibility criteria for the two measures. Because the two programs are administered separately, we could only speculate as to the reason why so many CPP disability beneficiaries do not receive the disability tax credit. It is possible that there is a knowledge gap as to potential eligibility for the disability tax credit.

With this in mind, the Committee believes that it is essential first to determine the reason for the problem, if any, and then to identify possible solutions for increasing the take-up rate amongst CPP disability beneficiaries of the disability tax credit. (The taxability of Canada Pension Plan disability benefits is discussed in Chapter 3.)

The Committee recommends that:

This recommendation has an unknown revenue cost. Additional tax relief offered through the disability tax credit arising from this recommendation should already be provided under existing legislation. This recommendation should involve only minor administrative costs.

The Committee noted a number of other suggestions for longer-term changes in the disability tax credit. In one paper prepared for the Committee,²⁰ a modification was outlined to achieve greater equity between those disability tax credit claimants whose disability-related expenses were largely non-itemizable, and who therefore received only the disability tax credit, and those claimants whose disability expenses were largely itemized medical costs, who received both the disability tax credit and the medical expense tax credit.

Under an example illustrating this suggestion, the existing disability tax credit amount would be split into a basic amount — say $4,000 — and a supplementary amount — say $2,500. All eligible qualified disability tax credit claimants would receive both amounts, but would be allowed to claim a medical expense tax credit only to the extent that their eligible medical expenses exceeded the supplementary credit amount of $2,500.

The change would mean that those with few or no itemizable costs would continue to receive the same amount of tax relief, while those with a heavy balance of itemizable costs would receive a modestly lower credit. However they would still, in most cases, have all of their relevant expenses recognized.

The Committee believes that the current disability tax credit provides important support to persons with disabilities, and that such support can be justified on the basis of tax equity. However, the disability tax credit is at best a blunt instrument, delivering a largely uniform benefit to individuals with sharply varying degrees of impairment, needs and additional non-itemizable costs.

As a result, it is difficult to justify the disability tax credit as a means of ensuring that persons with disabilities can participate fully in society. Effective assistance to enable full participation is better provided through tailored programs of support, administered through expenditure programs on an individualized basis and not through an instrument that, by its very nature, is inappropriate as a social policy vehicle.

In a federation such as Canada, such national programs of direct assistance to individuals require cooperation among various levels of government. The disability tax credit by itself should therefore not be viewed as the answer to the needs and aspirations of persons with disabilities but rather as one component of a broad range of supports and equity. The substantial improvements to such programs that are required in future to enable full participation appear to rest, in large part, on individually tailored programs of support in expenditure programs rather than on broad tax measures that are invariably insensitive to diverse needs.

Furthermore, the Committee recognizes that more than half of the benefits from the existing disability tax credit flow to those over 65, and this proportion will increase as Canada’s population ages. The requirements of seniors with disabilities deserve recognition, but the Committee believes that these are best addressed within measures designed specifically for the country’s rapidly aging population.

Because the disability tax credit is an important element in recognizing the needs of persons with disabilities, the Committee is recommending measures to clarify the existing disability tax credit and to make it more fair and accessible. We believe that such changes are justified on the basis of both equity and the needs of persons with disabilities.

But while the disability tax credit is important and improvements in its scope and fairness are essential, the credit by itself cannot provide the type of recognition and supports required by persons with disabilities. We are therefore recommending no general increase in the amount of the disability tax credit (above any automatic increases in light of inflation).

Rather, we feel strongly that additional available resources should largely be channelled into programs that can deliver benefits more effectively. Ideally, the Committee would like to see the disability tax credit play relatively less of a role in the system of supports to persons with disabilities. In Chapter 5, we recommend that any new substantial funding to promote fairness and inclusion for persons with disabilities not be allocated to tax measures.

¹ The disability tax credit, like other non-refundable credits, is calculated by multiplying a certain amount by a credit rate. The 16 percent credit rate is equivalent to the marginal tax rate on the first $35,000 of taxable income. The credit amount is indexed to the cost of living. In addition, provinces and territories generally grant a similar credit against provincial/territorial income tax, and the amount of tax relief from both federal and provincial/territorial disability tax credits averages approximately $1,600.

² Because the disability tax credit is primarily a fairness measure, it is not income tested and is available to all eligible taxpayers.

³ The supporting person can only claim the disability tax credit as a transfer if the person with the disability is dependent on the supporting person for the basic necessities of life (such as food, shelter or clothing).

⁴ The 1988 tax reform converted a number of tax deductions, including the disability deduction, into credits.

⁵ The Department of Finance recently conducted an evaluation of the disability tax credit, the results of which were published in the 2004 Tax Expenditures and Evaluations report.

⁶ Figure 2.2 presents tax expenditure data in current dollars (i.e., not adjusted for inflation). When inflation is taken into account, the real tax expenditure declines modestly from 1993 to 1999.

⁷ While only 1.5 percent of disability tax credit claimants are under age 25, most of the individuals eligible for the disability tax credit in this age group are likely children who would be claimed by their parents.

⁸ It should be noted, however, that only a small fraction of seniors are eligible for the disability tax credit. Only 5 percent of tax filers age 65 or more claimed the disability tax credit in 2001. That said, some seniors who would be eligible for the disability tax credit may not claim it because they do not have to pay income tax.

⁹ Smart and Stabile, Tax Support for the Disabled in Canada, 2003.

¹⁰ Until December 2003, the Canada Revenue Agency was known as the Canada Customs and Revenue Agency.

¹¹ Les Wall, President of the Schizophrenia Society, November 27, 2001.

¹² The Committee followed the consultation process and two Committee members were also participants in this process as representatives of disability organizations.

¹³ House of Commons Standing Committee on Human Resources Development and the Status of Persons with Disabilities, Tax Fairness for Persons with Disabilities, 2002, p. 16.

¹⁴ House of Commons Standing Committee on Human Resources Development and the Status of Persons with Disabilities, Tax Fairness for Persons with Disabilities, 2002, pp. 16—17.

¹⁵ The Committee recommends replacing the phrase ‘perceiving, thinking and remembering’ with the phrase ‘mental functions necessary for everyday life’ (see Recommendation 2.2). Medical doctors and psychologists would continue to be allowed to certify this type of marked restriction.

¹⁶ Under the Income Tax Act, individuals eligible for the disability tax credit cannot claim the disability tax credit when they claim attendant care or nursing home expenses in excess of $10,000 under the medical expense tax credit.

¹⁷ Statistics Canada, Disability Supports in Canada, 2001 — Tables, Catalogue no. 89-581-XIE, 2003, pp. 119, 130.

¹⁸ The province of Quebec operates its own similar plan, the Quebec Pension Plan.

¹⁹ Based on data provided by the Department of Finance.

²⁰ Smart and Stabile, Tax Support for the Disabled in Canada, 2003.