The disability tax credit for people with diabetes: could you be eligible?

While many people with diabetes might not describe their condition as a “disability,” people who spend a great deal of time – and have great difficulty – with their day-to-day diabetes management, may be able to apply for a disability tax credit from the Canada Revenue Agency.

According to the Agency’s website, “The disability tax credit is a non-refundable tax credit used to reduce income tax payable … A person with a severe and prolonged impairment in physical or mental functions may claim the disability amount once they are eligible for the credit.”

The rationale behind the disability tax credit is to provide relief to taxpayers for their disability costs, since these are additional and unavoidable expenses that other taxpayers don’t face.

The process of applying for the disability tax credit is prepared in conjunction with your doctor. He or she will submit the necessary application forms and backup material to the Canada Revenue Agency, if it is determined that you are eligible.

Who is eligible?

To be eligible for the disability tax credit, you must meet all of the following requirements:

• You must have an impairment in physical or mental functions that is prolonged, which means it has lasted, or is expected to last, for a continuous period of at least 12 months.
• The impairment must be severe, and it must restrict you all or mostly all of the time (at least 90% of the time).
• Your severe and prolonged impairment must be certified by a qualified practitioner (in the case of a person with diabetes, a doctor).

At the Canada Revenue Agency website, three questions are asked of potential applicants who indicate they have met the above requirements. Based upon your answers, the Agency will determine whether you are eligible to apply for the disability tax credit. The questions are as follows:

Question 1: Has your impairment in physical or mental functions lasted, or is it expected to last, for a continuous period of at least 12 months?

Question 2: Do you receive life-sustaining therapy? Life-sustaining therapy must meet both of the following conditions.

1. The therapy is required to support a vital function, even if it alleviates the symptoms
2. The therapy is needed at least 3 times per week, for an average of at least 14 hours per week

You must dedicate the time for the therapy – that is, you have to take time away from normal, everyday activities to receive it. If you receive therapy by a portable device, such as an insulin pump, or an implanted device, such as a pacemaker, the time the device takes to deliver the therapy does not count towards the 14-hour per week requirement. However, the time spent setting up a portable device does count.

If the therapy requires a regular dosage of medication that needs to be adjusted daily, the activities directly related to determining and administering the dosage are considered part of the therapy. In the case of a person with diabetes, this would include self-monitoring of blood glucose, preparing and administering insulin, calibrating the necessary equipment, and maintaining a log book of blood glucose levels.

However, activities that are considered to be part of following a dietary regime – such as carbohydrate calculation and physical activity – are not considered part of the 14-hour requirement. Activities such as following a dietary regimen, exercising, travelling to receive the therapy, attending medical appointments, or shopping for medication are also not included in this calculation.

Question 3: Does the life-sustaining therapy meet both of the conditions noted in Question 2?

Next steps

If you answer “yes” to all three questions, the Canada Revenue Agency acknowledges that you may be eligible for the disability tax credit.

The next step in the process is to visit your physician and have him or her complete the necessary paperwork to submit to the Canada Revenue Agency. The form (T2201) that your physician needs to complete can be found at the Agency’s website. To download them in preparation for your visit with your healthcare practitioner, click here.

Based on the information submitted by your physician, the Agency will assess your application to determine if you are eligible for the disability tax credit.