Understanding Disability Tax Credit
Disability Tax Credit (DTC) is a non-refundable tax credit that is intended to offset the additional costs of living with a disability. The Canadian government provides this tax credit to help people with disabilities live independently, participate in their communities, and achieve their goals.
To qualify for DTC, an individual has to meet the specific criteria outlined by the Canada Revenue Agency (CRA). The CRA defines a person with a disability as someone who has a severe and prolonged impairment in physical or mental functions.
What is Mental Health Impairment?
Mental health impairment is a type of disability that affects a person’s emotional well-being, cognitive abilities, or behaviour. Mental health conditions can range from mild, such as anxiety or depression, to severe, such as schizophrenia or bipolar disorder.
Mental health impairments can impact a person’s ability to work, socialize, and engage in daily life activities. While many people with mental health impairment can function independently, some require support and accommodations to manage their disability.
Does Mental Health Qualify for DTC?
Yes, mental health impairments may qualify for DTC if they meet the CRA’s definition of a person with a disability. The CRA recognizes that mental health impairments can have a significant impact on a person’s daily life and ability to function.
Criteria for Mental Health Impairment
To qualify for DTC based on a mental health impairment, the CRA requires that the individual must:
- Have a severe and prolonged impairment in mental functions
- Require life-sustaining therapy or treatment
Moreover, the CRA requires that the severity of the impairment must be verified by a qualified medical practitioner. The medical practitioner must complete Form T2201, Disability Tax Credit Certificate, to certify the severity and longevity of the individual’s impairment.
Benefits of Disability Tax Credit
Receiving DTC can provide various financial benefits to individuals with mental health impairments, such as:
1. Tax Credit
DTC provides a tax credit of up to $8,576 per year, depending on the severity and length of the individual’s disability. This tax credit can help offset the additional expenses incurred due to their disability.
2. Registered Disability Savings Plan
Individuals who receive DTC may be eligible to open a Registered Disability Savings Plan (RDSP). RDSP is a long-term savings plan designed for people with disabilities to help them save for their future. The Canadian government provides grants and bonds to help individuals with disabilities save for their future.
3. Provincial and Territorial Programs
Receiving DTC can also make an individual eligible for various provincial and territorial programs designed to support individuals with disabilities. These programs can provide financial assistance, employment support, and housing support.
Misconceptions about Mental Health Impairments
There are several misconceptions and stigma surrounding mental health impairments. Some of the common misconceptions are:
1. Mental Health Impairments are not “real” disabilities
Many people assume that mental health impairments are not real disabilities since they are not visible. However, mental health impairments can have a significant impact on a person’s daily life and ability to function.
2. People with Mental Health Impairments are “weak” or “lazy”
There is a common misconception that people with mental health impairments are weak or lazy. However, mental health impairments are medical conditions that require treatment and support.
3. Mental Health Impairments are not treatable
Many people assume that mental health impairments are not treatable, which is not true. Various treatments, such as therapy and medication, can help people with mental health impairments manage their symptoms and improve their quality of life.
Conclusion
Mental health impairments can qualify for Disability Tax Credit if they meet the CRA’s definition of a person with a disability. Receiving DTC can provide financial benefits and make an individual eligible for various provincial and territorial programs designed to support individuals with disabilities. It is essential to understand the misconceptions and stigma surrounding mental health impairments and recognize that they are real disabilities that require treatment and support.