RECOMMENDATION 2.1

The Income Tax Act be amended to replace the present wording ‘severe and prolonged mental or physical impairment’ with the wording ‘severe and prolonged impairment in physical or mental functions.’

RECOMMENDATION 2.2

The term ‘perceiving, thinking and remembering’ as a basic activity of daily living in the Income Tax Act and on the T2201 form, be replaced with the term ‘mental functions necessary for everyday life.’

In our view, mental functions are the range of processes that govern how people think, feel and behave. Based on our consultations and research, they include memory, problem solving, judgment, perception, learning, attention, concentration, verbal and non-verbal comprehension and expression, and the regulation of behaviour and emotions. These functions are necessary for activities of everyday life that are required for self-care, health and safety, social skills and simple transactions.

RECOMMENDATION 2.3

The Canada Revenue Agency state in its explanatory materials and on the application form for the disability tax credit that some impairments in function can result in a marked restriction in a basic activity of daily living, even though these impairments may have signs and symptoms that may be intermittent.

RECOMMENDATION 2.4

The Income Tax Act be amended to provide that persons with a severe and prolonged impairment who are restricted in two or more basic activities of daily living qualify for the disability tax credit if the cumulative effects of the restriction are equivalent to a marked restriction in a single basic activity of daily living all or substantially all of the time.

RECOMMENDATION 2.5

The federal government ensure that the legislative and administrative requirements concerning the present interpretation regarding life-sustaining therapy adequately reflect the time taken for essential preparation, administration of and necessary recovery from life-sustaining therapy as recently interpreted in decisions of the Tax Court of Canada.

RECOMMENDATION 2.6

The Income Tax Act be amended to include physiotherapists in the list of qualified practitioners eligible to certify for the purposes of the disability tax credit a marked restriction in walking.

The federal government consult with the Canadian Nurses Association to determine under what circumstances nurse practitioners could be allowed to certify eligibility for the disability tax credit.

RECOMMENDATION 2.7

The Canada Revenue Agency:

• ensure that its staff follow the procedures relating to the disability tax credit in its Taxation Operations Manuals and Interpretation Bulletins;

• ensure that its general staff are able to assist persons with disabilities with respect to completing and filing the T2201 form, or refer them to appropriate specialized personnel where required;

• develop training programs, workshops and guidelines for its staff regarding changes to the legislation and interpretive guidelines for the disability tax credit, and the administration of tax measures for persons with disabilities;

• develop appropriate communications and educational material for qualified practitioners to assist them in completing the T2201 form;

• make clear in its communication materials that a second informal review is available to taxpayers denied the disability tax credit; and

• monitor the achievement of these recommendations.

RECOMMENDATION 2.8

The Canada Revenue Agency continue to improve the T2201 form by ensuring that:

• its ongoing consultations involve a wide representation of consumers and qualified practitioners regarding the T2201 form or related disability tax credit materials such as clarification letters and letters to individuals whose claim has been denied;

• the guidelines relating to the completion of the form are clear and concise to enable claimants and qualified practitioners to understand the eligibility criteria for the disability tax credit;

• examples and questions on the T2201 form reflect real-life situations to enable an appropriate determination of the severity of the impairment;

• examples and questions on the T2201 form continue to be revised as necessary and appropriate to reflect changes in legislation and court decisions; and

• data are collected, in order to evaluate the impact of the revisions to the T2201 form, on the number and percentage of successful and unsuccessful claims by basic activity of daily living, and claims for which additional information was requested (clarification letters) by basic activity of daily living.

RECOMMENDATION 2.9

The Canada Revenue Agency take the following steps with respect to clarification letters:

• specify in writing why clarification is required in order to help qualified practitioners address specific issues or concerns; and

• ensure that all questions are relevant to the specific disability, instead of using a uniform approach for all impairments.

RECOMMENDATION 2.10

The Canada Revenue Agency intensify its existing efforts to ensure that:

• taxpayers who receive a letter denying their disability tax credit claims be:

• appeals officers have access, if required, to competent medical advice when reviewing Notice of Objection and additional medical reports; and

• appeals officers meet with taxpayers or their representative in appropriate cases.

RECOMMENDATION 2.11

The Canada Revenue Agency develop an alternative dispute resolution process for disability tax credit claims following an Appeals Branch denial, relying on an informal but independent process based on basic fairness criteria.

The Canada Revenue Agency mount a pilot project to test the operation of the suggested alternative dispute resolution process.

RECOMMENDATION 2.12

In order to deal with the administrative aspects of the disability tax credit and the achievement of the previously enumerated recommendations, the Canada Revenue Agency form a consultative committee composed of consumer and professional representatives that would report directly to the Minister of National Revenue on all administrative aspects of the tax system related to persons with disabilities.

RECOMMENDATION 2.13

The Canada Revenue Agency, in conjunction with the appropriate departments, undertake a review of Canada Pension Plan disability beneficiaries and disability tax credit claimants with the goal of evaluating possible reasons for the low take-up of the disability tax credit by CPP disability beneficiaries.

The Canada Revenue Agency work with other government departments to ensure that all applicants for CPP disability benefits are advised of their potential eligibility for the disability tax credit, and furnished with forms and information so that they can readily consider their eligibility and make an application for the disability tax credit if appropriate. If, as a result of this work, the government finds that there is a significant overlap in eligibility, it should explore whether a simplified application process or joint administration of some aspects of the two programs is warranted.

RECOMMENDATION 3.1

The government introduce a disability supports deduction to allow the full deductibility of the cost of disability supports purchased for the purposes of employment or education.

RECOMMENDATION 3.2

The cost of such items as job coaches and readers, Braille note takers, page turners, print readers, voice-operated software, memory books, assistive devices used to access computer technology, and similar disability-related expenses be added to the list of expenses recognized by the deduction.

RECOMMENDATION 3.3

The government change the name of the medical expense tax credit to the ‘medical and disability expense tax credit.’

RECOMMENDATION 3.4

The Department of Finance and the Canada Revenue Agency review currently available data and, where possible, gather new data on the actual expenses being claimed under the medical expense tax credit, and consider the appropriateness of these claims.

RECOMMENDATION 3.5

The maximum credit under the refundable medical expense supplement be increased from $562 to $1,000 and continue to be indexed to the cost of living.

RECOMMENDATION 3.6

The time over which contributions may be made to a registered education savings plan for a person with a disability be extended to 25 years from 21 years, and that the time before the plans must be liquidated be extended from 25 to 30 years from inception.

The government broaden the list of educational programs that qualify under registered education savings plans to ensure that they accommodate the more diverse needs of persons with disabilities.

RECOMMENDATION 3.7

Information for businesses about the deductibility of capital expenses to accommodate persons with disabilities be made more widely available in Canada Revenue Agency guides.

RECOMMENDATION 3.8

As part of its efforts to develop measures to encourage the full participation of persons with disabilities, the government review the effectiveness of the United States’ Work Opportunity Tax Credit.

RECOMMENDATION 4.1

The limit of expenses claimable under the medical expense tax credit by caregivers be increased from $5,000 to $10,000 for those with dependent relatives eligible for the disability tax credit.

RECOMMENDATION 4.2

The government review the RRSP/RRIF rules in order to allow additional flexibility in respect of a deceased’s RRSP or RRIF proceeds left to a financially dependent child or grandchild with a disability. Such provisions should include allowing these proceeds to be rolled over to a discretionary trust for that individual, provided that no person other than the disabled beneficiary may access the income or capital of the trust during his or her lifetime.

RECOMMENDATION 4.3

The federal government increase the amount of the Child Disability Benefit by $600 to raise the total maximum annual benefit from $1,653 to $2,253, and that this amount continue to be indexed to the cost of living.

RECOMMENDATION 5.1

Priority should be given to expenditure programs rather than tax measures to target new funding where the need is greatest. The Committee recognizes that the development of such programs would involve consultations with provincial and territorial governments and the disability community.