The Honorable James Flaherty, Minister of Finance, has once again taken the initiative to ensure that people with disabilities are able to access the RDSP.
You are probably aware that the Disability Tax Credit (DTC) is one of the key eligibility requirements to open an RDSP.
You might not be aware that most determinations made by Canada Revenue Agency under the Income Tax Act can be appealed to the Tax Court of Canada. This includes applications for the Disability Tax Credit.
There is, however, currently a law, that prevents people from making an appeal to the Tax Court of Canada unless it affects their tax payable. This means that if a person has insufficient income to pay taxes, and has nobody to transfer the Disability Tax Credit to, then a determination on their eligibility for the DTC cannot be appealed to the Tax Court (even if it might affect their ability to open an RDSP).
Minister Flaherty today announced his intent to change this legislation:
“Procedural issues of this nature should not be an impediment for individuals who wish to establish their right to the Disability Tax Credit and, as a result, also their right to open an RDSP.
“To promote the fair and equitable treatment of Canadians, I intend to introduce legislative amendments at the earliest opportunity so that individuals can, in every case, appeal a determination concerning their eligibility for the Disability Tax Credit.” – Minister James Flaherty