Mentally disabled increasingly restricted from key tax credit amid purported CRA clampdown

Health groups accuse Liberals of restricting diabetics' access to disability tax credit

SHAWN MCCARTHY
OTTAWA
OCTOBER 22, 2017

The Canada Revenue Agency is under fire for denying a growing number of people suffering from Type 1 diabetes from receiving a disability tax credit despite doctor's certifications that they are eligible.

In a letter to Revenue Minister Diane Lebouthillier released on Sunday, Diabetes Canada and five other medical organizations complained that "it has become very difficult if not impossible, for adults with [Type1 diabetes] to qualify" for the tax credit, which is worth an average of $1,500 a year.

At a news conference with Conservative MPs, Diabetes Canada's director of federal affairs, Kimberley Hanson, said six medical organizations sent the letter nearly three weeks ago after months of on-again, off-again communication with the CRA. Neither the minister nor the CRA responded to that letter until Friday after opposition MPs asked a question in the House of Commons, Ms. Hanson said.

"Diabetes is a condition that can be very challenging for many people to live with and can take a lot of time for people to manage effectively, particularly Type 1 diabetes," Ms. Hanson said. She said patients pay out of pocket anywhere from $5,000 to $15,000 a year to treat the disease.

"All we're asking is that CRA reverts to their own stated and documented practice, and allow these applications, allow people with diabetes to be able to access this program which will help ensure that they continue to be able to access the medications and the medical supplies they really desperately need to manage their disease," Ms. Hanson said.

Conservative critics pounced on the CRA's treatment of diabetics, describing it as another example of a Liberal government drive to increase revenue by squeezing ordinary Canadians.

Ms. Lebouthillier also faced criticism earlier this month when Canada Revenue Agency was reported to be cracking down on employee discounts and treating them as taxable gain for income-tax purposes. The minister claimed no knowledge of that practice and ordered it stopped.

Ms. Hanson estimated that previously some 80 per cent of adults with Type 1 diabetes were approved for the disability tax credit, but now virtually all are being rejected. She estimated there are up to 100,000 Canadians who suffer from Type 1 diabetes and could qualify for the tax credit.

There has been a substantial increase in claims in the past two years, owing in part to the emergence of private companies that prepare applications for a fee. But claims still have to include a certification from a doctor or nurse practitioner that the diabetic must spend at least 14 hours a week on life-sustaining therapies, Ms. Hanson noted.

A spokesman for Ms. Lebouthillier said Diabetes Canada's complaints are "very concerning" but said the government has taken steps over the past year to increase access to the disability tax credit (DTC).

"It's important to note that there has been no change to the eligibility criteria for the [disability tax credit] related to diabetes," CRA spokesman John Power said in an e-mail. "The CRA has not changed its decision-making process with regard to DTC eligibility criteria."

He said the minister has asked the agency to improve its data collection to better understand what is happening with various groups that claim the tax credit under the category of needing "life-sustaining therapy." CRA currently do not keep data based on the underlying conditions such as diabetes, but only by the broader category.

CRA maintains that many activities needed to manage the disease – such meal planning – do not fall under the category of life-sustaining therapies. Mr. Power said there can be confusion among medical practitioners as to what activities do qualify.

People who qualify for the disability tax credit can also make contributions to a Registered Disability Savings Plan (RDSP), but would face potential tax problems if they are later rejected by CRA.

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