Disability is not a fun topic, but it is one that is becoming a more likely reality for many families. Medical advances and increased life spans keep people alive but not always with the full mental and physical capacity to live independently. It is one thing to lose your hearing or sight but did you know that kidney dialysis treatment or being restricted in performing daily living skills like dressing oneself may also qualify you as being disabled? According to the Canada Revenue Agency’s Disability Tax Credit, it may.

The Disability Tax Credit (DTC) is intended for individuals who have a severe and prolonged impairment in physical or mental functions for twelve months or more. The qualifying disability is certified by the appropriate medical professional who, depending on the type of disability, can be a medical doctor, optometrist, speech-language pathologist, audiologist, occupational therapist, physiotherapist or psychologist.

The benefit of the DTC is that it is a non-refundable tax credit used to reduce income tax payable on your income tax return. All or part of this amount may be transferred to your spouse/common-law partner or another supporting person. Imagine how a family’s personal and financial resources can be affected when coping with a loved one’s special needs. The DTC, which can be claimed retroactively with the appropriate medical certification, can go a long way in providing financial support.

In my experience, many people are not aware of the DTC because their ability to live independently decreased gradually over time or there may have been a health crisis that overwhelmed the patient and/or the family that they are unable to investigate possible financial and tax relief options.

That is why I call upon medical practitioners, social workers, tax accountants and anyone else who helps people with their health or their finances, to be proactive and talk about the DTC when there is a change in a patient/client’s physical abilities. The Canada Revenue Agency (CRA) must validate the medical certificate. There is no guarantee that someone who is already receiving disability benefits from another program will be accepted under the CRA criteria, but it is certainly worthwhile to investigate the possibility of qualifying for the federal DTC and/or relevant provincial disability tax credit. For more information, please consult the CRA website at http://tinyurl.com/3bw9zeu.

Many parents worry about the financial security of their disabled children. If this is your situation, investigate the benefits of opening a Registered Disability Savings Plan (RDSP). Introduced in 2008, a participant may hold only one RDSP account which is limited to a lifetime total of $200,000 in non-government contributions. While not tax-deductible, contributions accumulate tax free until the money is withdrawn and contributions do not affect federal benefits and have little, if any, impact on provincial benefits.

Depending on family net income, the federal government may pay a Canada disability savings bond into an RDSP of up to $1,000 annually, up to a maximum lifetime limit of $20,000, with no personal contributions required. Furthermore, depending on family net income and contributions, an RDSP beneficiary may receive a Canada disability savings grant of up to $3,500 per year, up to a maximum lifetime limit of $70,000.

Both bonds and grants are available until the year the participant reaches age 49. Generally, bonds and grants must remain in the account for at least 10 years before a withdrawal may be made, and withdrawals must begin by the end of the year in which the participant reaches 60. There is also a rollover option as of July 2011 for the Registered Retirement Savings Plan (RRSP), Registered Retirement Income Fund (RRIF) or Registered Pension Plan (RPP) of any deceased individual to be transferred on a tax-deferred basis to an RDSP for a financially dependent infirm child or grandchild. Please consult your financial adviser or see the CRA website for more details. ttp://tinyurl.com/yhvvr8l