Financial Tools and Tax Benefits for People with Parkinson’s and their Carepartners
Utilizing financial tools and taking advantage of several key government benefits is crucial for individuals with Parkinson’s disease (PD) and their loved ones, as it can significantly alleviate the financial burden that is sometimes associated with the condition. Managing the costs of ongoing medical care, home modifications, and potential loss of income due to the disease can be overwhelming. Fortunately, by making thoughtful and informed decisions, families can better prepare for these challenges, ensuring a more secure financial future.
Parkinson Society BC (PSBC) is dedicated to providing the necessary resources and guidance to help you navigate financial complexities while empowering you and your loved ones.
Note: The information provided here is intended for general guidance and should not replace consultation with a professional financial advisor.
Financial Tools and Tax Benefits
Whether you’re looking to reduce your tax burden or build a more secure financial future, the following information can help you make informed decisions and ensure you receive the benefits you deserve.
Disability Tax Credit
The Disability Tax Credit (DTC) is a non-refundable tax credit designed to assist individuals with disabilities, as well as their family members, in reducing their income tax. To be eligible for the DTC, a medical practitioner must certify that you have restrictions in specified categories of basic activities of daily living, or that you require life-sustaining therapy that supports a vital function. Categories include walking, mental functions, dressing, feeding, bowel or bladder functions, hearing, speaking, vision, and life-sustaining therapy. You can qualify if you have a severe restriction in one category, or are restricted a little less, but in two or more categories. Restrictions must also have lasted or are expected to last at least one year.
There are many ways to apply. You can fill in Part A using a paper form (Form T2201). To download a printable copy, visit bit.ly/DTCFormT2201. When applying with the paper form, medical practitioners can complete Part B of the same form, then return it to the applicant, who must send in a completed application to the CRA. A medical practitioner for the purposes of the DTC includes the following: medical doctor, nurse practitioner, audiologist, occupational therapist, optometrist, physiotherapist, psychologist, or speech-language pathologist.
You can also apply online or over the phone with the CRA. When applying in either of these two ways, applicants will receive a reference number that their practitioners can use to send in the application on their patient’s behalf through the online digital application for medical professionals.
It is important to apply for the DTC even if you do not make taxable income, because it is a gateway to other important benefits – importantly, the Canada Workers Benefit, Home Accessibility Expenses, Registered Disability Savings Plan, Canada Disability Benefit, and more. It also can play a role in the Canada Caregiver Credit.
In 2023, the maximum disability amount was $9,428 for people 18 years and older. Depending on how much tax you pay, you will receive a portion of the maximum as a reduction to the amount of taxes owing, or as a tax return.
Disability Supports Deduction
Individuals with physical or mental impairments who have incurred certain medical expenses may be eligible to claim the Disability Supports Deduction (DSD) under specific conditions.
This deduction can be claimed only by the person with the disability and covers expenses paid in the year to enable them to work, attend school, or conduct research for which they received a grant. Eligible expenses include attendant care, electronic speech synthesizers, and job coaching services, among others, often requiring a prescription or certification from a medical practitioner.
Certain amounts, such as those claimed as medical expenses or reimbursed by insurance, cannot be claimed. To calculate the deduction, individuals must use Form T929 and report the amount on line 21500 of their tax return, ensuring the expenses are claimed in the year they were paid.
Home Accessibility Tax Credit
The Home Accessibility Tax Credit (HATC) is intended for eligible home renovation or modification expenses. If you made any renovations to your home to make it more accessible, you can claim up to $20,000 in renovations on your taxes. The HATC is calculated by applying the lowest personal income tax rate, which was 15% in 2024, to a maximum of $20,000, which would provide a tax credit of up to $3,000. An individual qualifies if they are either eligible for the Disability Tax Credit (DTC) at any time in the year, or 65 years of age or older at the end of the year.
Examples of what may be included are wheelchair ramps and walk-in bathtubs/showers. A list of eligible expenses can be found at bit.ly/HATCexpenses. The HATC is non-refundable.
Canada Caregiver Credit
The Canada Caregiver Credit (CCC) is available to anyone who supports a spouse, common-law partner, or dependent with a physical or mental impairment. The amount you can claim varies based on your relationship to the individual for whom you are claiming the CCC, your specific circumstances, their net income, and whether other credits are also being claimed for that person.
For a spouse or common-law partner, you may be able to claim $2,499 on line 30300. Additionally, you could claim up to $7,999 on line 30425. You do not need any supporting medical certification if the CRA already has an approved Form T2201, Disability Tax Credit Certificate for the specified period. The CCC is non-refundable.
Registered Disability Savings Plan
A Registered Disability Savings Plan (RDSP) is designed to help individuals approved for the Disability Tax Credit (DTC) save for long-term financial security. Contributions to this plan are not tax-deductible. Individuals can only open the plan up to the calendar year in which they turn 59. They can only access grants and bonds up to the calendar year in which they turn 49. Grants can be triggered contributions, while bonds do not require contributions, which benefits those with low to no income. Always make sure to file your taxes to ensure you are getting the full grant and bond amounts. Any money in the plan is considered an exempt asset and, therefore, will not affect receiving provincial disability benefits.
Withdrawals from the RDSP do not count as income for the beneficiary. However, amounts from the Canada Disability Savings Grant, the Canada Disability Savings Bond, investment earnings within the plan, and rollover proceeds are taxable when paid out.
Canada Pension Plan – Disability
The Canada Pension Plan (CPP) disability benefit is a monthly payment available to individuals who are unable to work due to a disability. To qualify, individuals must be under the age of 65, have a long-term physical or mental limitation that prevents them from gainful (sufficient to support oneself) employment, and have contributed enough to the CPP. Those who currently receive the monthly CPP retirement pension, have received it for more than 15 months, and are between the ages of 60 to 65 can qualify for the CPP post-retirement disability benefit instead. Those who have had it for less than 15 months can apply for the Canada Pension Plan (CPP) disability benefit.
To fulfill the minimum contribution criteria, individuals must have made eligible contributions to the CPP in four out of the last six years, or have at least 25 years of contributions, including three of the last six years, or satisfy the late applicant provision requirements.
If you have any questions about your financial options, please make sure to speak with a financial advisor who specializes in disabilities.
This article was reviewed for accuracy by Cynthia Minh & Sharareh Saremi from Disability Alliance BC | disabilityalliancebc.org
Source
The Government of Canada | www.canada.ca
This content was published in the Fall 2024 edition of our quarterly magazine, Viewpoints. The content was accurate as of this publication date.