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Amidst Outcry, CRA Announces Support for DTC Claimants

Posted: December 05, 2017 By : Knowledge Bureau Staff
Posted in: Strategic Thinking, Financial Literacy, CRA, Financial Advisor, tax credits, knowledge bureau, Evelyn Jacks, disability tax credit, Tax Specialist, tax courses, distinguished financial advisor, financial education, Disability Advisory Committee, Type 1 Diabetes, Disability Tax Credit form, tax relief, Diabetes Canada

Canada Revenue Agency (CRA) has again come under fire for its policies for assessing the claims of people with Type 1 diabetes who previously qualified for the Disability Tax Credit (DTC). However, it is defending its policies as being consistent.

Further, to ensure transparency and accessibility of tax provisions in the future for all people with disabilities, CRA is reinstating the Disability Advisory Committee (DAC) to begin advising the government on the needs and expectations of the disability starting in January 2018.

At issue is a raucous disagreement, reported by the CBC. Diabetes Canada and the Juvenile Diabetes Research Foundation contend that CRA has ruled out allowing DTC claims for most Type 1 diabetes patients, regardless of what their doctors say on the T2201 Disability Tax Credit Form. According to the report, the groups obtained an internal CRA memo, dated May 2, 2017, that says: “Unless there are exceptional circumstances, adults with diabetes can generally manage their daily insulin therapy without taking 14 hours per week.”

The CRA receives an average of 250,000 applications for the DTC each year. It says in a release posted December 4, 2017, that it approves more than 80 percent of these applications (approximately 770,000 people who made the claim on their tax returns in 2016-17) and pays out more than $1.3 billion in tax relief. Those amounts are expected to increase this tax filing year and in the future, as Canada’s aging population is increasingly vulnerable to conditions that markedly restrict daily living activities.


Diabetes Canada, however, says the changes to the assessing policies outlined in the May 2017 memo have not been taken into account in those statistics, suggesting that for 2017 so far, CRA has denied 70 percent of DTC applications for adults with Type 1 diabetes.

To qualify for the credit, diabetic adults must spend at least 14 hours a week on activities to treat their diabetes, which CRA says is unlikely given recent technological improvements to monitor and administer life-sustaining therapies. For assistance with appealing disallowed claims, taxpayers should seek the help of their tax accountants or a DFA–Tax Services Specialist™ before year end.

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