Among Canada’s social support systems, which often falter in meeting the needs of people with disabilities, the disability tax credit stands out as a key area demanding reform.  

It is a nonrefundable federal tax credit meant to help people with disabilities and their families offset some of their additional costs by reducing their income tax.   

This is not its only function.   

It is also an exclusive gateway to other important financial security programs such as the registered disability savings plan and the child disability benefit. 

The disability tax credit has long been a thorn in the side of disability advocates. It is plagued by low uptake rates with complex and often misunderstood eligibility criteria, leaving many in need without adequate support. 

That’s why the recent report from the Canada Revenue Agency’s disability advisory committee, which illuminates the credit’s ongoing failures and underscores the need for change, provides a glimmer of hope for improvement. 

But this need – always pressing – has now become urgent.  

The recent federal budget announced that the forthcoming Canada disability benefit – a new monthly payment approved unanimously last year by Parliament to lift people with disabilities out of poverty – is set to be delivered in 2025 with the disability tax credit as the gateway. No disability tax credit, no benefit. 

Therefore, the government must work toward implementing meaningful, long-overdue reforms suggested in the Canada Revenue Agency’s committee report, such as providing clear language about who qualifies; greater support for health-care professionals helping to fill out applications; widening the scope of professionals authorized to assist in applications; and harmonization of federal-provincial-territorial programs.    

Anything less would be a disservice to the people it’s meant to serve. 

Dismay greeted the budget announcement that the new benefit would be delivered through the disability tax credit system. This scenario was feared in the disability community and discouraged loud and clear through multiple public consultations.  

The new benefit is meant to help lift some of the most vulnerable members of our community out of poverty. But, how can it do that when it’s delivered through a system that is notoriously difficult to access and riddled with bureaucratic hurdles? 

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Some estimates suggest that only 40 per cent of working-age adults with a “severe” disability in Canada have been approved for the tax credit. The Canada Revenue Agency’s committee report indicates only 25 per cent of the most “severely” disabled complete the application, receive the required certificate, file an income tax return and claim the tax credit. 

That stark reality underscores the pressing need for an overhaul. 

One and half million of the eight million people in Canada who have a disability live in poverty. The situation is even worse for people with an intellectual disability. This is the population supported by Inclusion Canada, a national federation that works to support people with an intellectual disability and their families, as well as to advance their full inclusion and human rights. 

Seventy-three per cent of working-age adults with an intellectual disability who live on their own live in poverty. 

People with intellectual disabilities are far less likely to have safe and affordable housing, inclusive education and paid employment, leaving them to rely disproportionately on government sources of income assistance. 

The Canada Revenue Agency committee’s 26 recommendations point to cracks in the foundation of the disability tax credit and paint a troubling picture of a system that frequently fails to meet the diverse and complex needs of those it intends to support. Many recommendations offer hope, with some being particularly important for helping people on their path to access the new benefit.  

These are among the recommendations from the report that require immediate action. 

  1. Increase education and awareness 

The Canada disability benefit is intended to support “working age” Canadians; between 18 and 64 years old. But in 2019, more than 60 per cent of people approved for the disability tax credit were under 18 or over 64 years of age. This demographic will not be eligible for the new benefit. If the disability tax credit is the gateway, we need to address the low uptake for the disability tax credit now.  

This low uptake often stems from widespread misinformation and a lack of awareness surrounding the tax credit. Many people and their health-care practitioners mistakenly believe eligibility is tied to employment status or taxable income. That is not the case. 

Applying for the disability tax credit is beneficial even if you don’t work or make money. As the report notes, it’s more important than ever to develop clear messaging on why filing taxes, even without taxable income, is so important. 

In light of the government’s choice to use the existing tax credit as the gateway to the new benefit, widespread, easy-to-understand, plain-language education on the tax credit must be delivered by the government, as well as a wide range of community-based stakeholders. 

  1. Support health-care providers in filling out applications

For those with an intellectual disability, it can be a challenge to get a health-care practitioner to fill out an application because of their own confusion around eligibility requirements. The delivery of the new disability benefit through the disability tax credit system exacerbates this concern. 

In addition, when a health-care practitioner lacks a comprehensive understanding of the program’s eligibility criteria, specifically around intellectual disability, they might hesitate or decline to complete the application. 

That leaves their patient unable to access the tax credit and other important supports to which they may be entitled. Health-care practitioners thus act as gatekeepers, often erroneously. 

This underscores the urgent need for the government to improve resources, knowledge and training to support health-care providers in completing disability tax credit certificate applications. 

Proper guidance and education targeted toward health-care practitioners would help create a health-care community committed to supporting people with disabilities in accessing all their eligible benefits, including the new disability benefit. 

  1. Expand the range of professionals

Expanding the accepted range of professionals qualified to provide certification to include various licensed health and social-services providers would help dismantle the substantial barriers faced by many people with disabilities, particularly those with limited financial means or without regular access to primary-care providers. 

Many families are constantly challenged by the lack of a family doctor or the high cost of having medical forms, such as the application for the disability tax credit, completed. Many even give up on the idea of applying for the tax credit as a result. 

  1. Automatic eligibility

Better alignment between eligibility criteria for provincial/territorial programs and the disability tax credit would recognize equivalencies and facilitate automatic eligibility for the tax credit among recipients of disability benefits from other levels of government. 

Currently, disparities in eligibility requirements among federal, provincial and territorial disability programs lead to confusion and undue administrative burdens for applicants, who must repeatedly substantiate their disability status across multiple systems. 

By harmonizing these processes and eliminating duplicative efforts, particularly in accessing the new benefit, administrative burdens can be alleviated. 


The disability tax credit serves as a critical entry point for people with disabilities to embark on their path to financial security, but it falls short in many ways. 

The Canada Revenue Agency’s committee report presents some good solutions for transforming it into a more equitable and inclusive system that better serves the needs of individuals with disabilities. 

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Jill Teeple
Jill Teeple is vice-president of Inclusion Canada and a former financial adviser to clients with disabilities and their families. She maintains the certified financial planner designation. 

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