Chrystia Freeland and Justin Trudeau

On April 19th, the Deputy Prime Minister and Minister of Finance, the Honourable Chrystia Freeland, released Budget 2021: A Recovery Plan for Jobs, Growth, and Resilience. Within the budget there are some exciting mentions related to the Canadian Disability Benefit as well as the Disability Tax Credit (DTC) and the Registered Disability Savings Plan (RDSP). Here is an excerpt from the report:

Towards a New Disability Benefit

Since 2015, the government has taken steps towards building an inclusive and resilient economy that supports people with disabilities. In addition to enacting groundbreaking legislation to create a barrier-free Canada, the government has also taken concrete steps to help people with disabilities receive enhanced programming and access to benefits, savings plans, and education funding.

The pandemic has exposed many of the long-standing challenges persons with disabilities face, including an increased risk of poverty. The Government of Canada has a number of programs and services in place that provide support to Canadians with disabilities but these are often complex and can be difficult to navigate for users. To ensure all persons with disabilities have the support they need to overcome persistent barriers to full economic and social participation, the government is committed to bringing forward a new disability benefit.

  • Budget 2021 proposes to provide $11.9 million over three years, starting in 2021-22, to Employment and Social Development Canada to undertake consultations to reform the eligibility process for federal disability programs and benefits. This will help maximize the reach of these programs and improve the lives of Canadians living with disabilities. This work would feed directly into the design of a new disability benefit.

In preparation for legislation, the government will undertake extensive consultations with stakeholders on the design of the new benefit and engage with provinces and territories, which play a central role in providing support to many Canadians with disabilities. Employment and Social Development Canada will also establish a steering committee to oversee the development of this work, alongside the Canada Revenue Agency, the Department of Finance Canada and Veterans Affairs Canada.

Improving Access to the Disability Tax Credit

In 2017, the Government of Canada reinstated the Canada Revenue Agency’s Disability Advisory Committee to ensure tax measures for persons with disabilities are administered in a fair, transparent, and accessible way. Since the release of the committee’s first annual report in 2019, the government has introduced many important changes, including improvements to its communications and outreach activities for the Disability Tax Credit and changes to Registered Disability Savings Plans to better protect beneficiaries. As the government considers new recommendations from the committee, released in a second report on April 9, 2021, the government is proposing to take further steps to act on the guidance of the committee by improving the eligibility criteria for mental functions and life-sustaining therapy. To help more families and people living with disabilities access the Disability Tax Credit, and other related support measures like the Registered Disability Savings Plan and the Child Disability Benefit:

  • Budget 2021 proposes to update the list of mental functions of everyday life that is used for assessment for the Disability Tax Credit. Using terms that are more clinically relevant would make it easier to be assessed, reduce delays, and improve access to benefits.
  • Budget 2021 also proposes to recognize more activities in determining time spent on life-sustaining therapy and to reduce the minimum required frequency of therapy to qualify for the Disability Tax Credit. To ensure these changes enable applicants to have a fair and proper assessment of their eligibility for the Disability Tax Credit, the government will undertake a review of these changes in 2023.

It is estimated that, as a result of these measures, an additional 45,000 people will qualify for the Disability Tax Credit, and related benefit programs linked to its eligibility, each year. This represents $376 million in additional support over five years, starting in 2021-22.

The proposed changes would apply beginning in the 2021 tax year. To read the full report, click here.