The Top 5 Reasons the CRA denies Disability Tax Credit Applications #4

Reason #4: Not Meeting the Criteria

Not every person with an illness, injury or disorder meets the criteria for this tax credit. A person will be denied the Disability Tax Credit if their doctor indicates that they do not meet the criteria. Here are a couple of examples:

-If a person is blind in one eye and applies in the category Vision they will be denied because the criteria states that the person must be blind in both eyes.

-If a person applies in the category Life Sustaining Therapy because they are diabetic but control their diabetes with pills and do not have to inject insulin, they will be denied, or if they do take insulin but the doctor does not certify that they require 14 hours per week to manage the therapy they will not meet the criteria of markedly restricted.

An important aspect of the marked restriction categories (Speaking, Hearing, Walking, Eliminating, Feeding, Dressing and Mental Functions necessary for everyday life) is that the person must be unable or take an inordinate amount of time to perform the function all or substantially all of the time (at least 90% of the time). If an individual applies in any of the markedly restricted categories but only have difficulty some of the time due to symptoms that flare up only once in a while, they will be denied.

The 90% rule can often be quite baffling for both the person with the impairment and the doctor. The CRA interpretation and enforcement of the rule is inconsistent and often quite confusing, especially when you consider how diverse the categories are. When you compare the 90% requirement to two categories such as “Dressing” and “Mental Functions” the inconsistency becomes quite clear, an individual is typically performing mental functions at all times during their waking life but will only dress or be dressed twice a day. Another issue is that many doctors do not include this type of information in their patients medical files and are often unaware of the extent to which their patients are affected on a day to day basis in a home setting.

The Cumulative effect of significant restrictions is another component of the application that is quite often misunderstood by medical professionals. This category was added in 2005 in recognition that some people who did not meet the criteria for a marked restriction were “significantly” impaired nonetheless. This category is designed for individuals who have significant impairments in two or more activities of daily living (the same categories mentioned earlier). We often receive or review completed application forms where a doctor has only checked off one category within the cumulative section and if this is the only category selected on the application it will be denied.

As your Disability Tax Credit Advisor your application will be thoroughly checked for errors and omissions to ensure that it is viable. Should we identify any potential issues we either return the application to you or directly to your qualified practitioner with comprehensive instructions to assist in its completion. Only when the application has passed our review will it be submitted to the Canada Revenue Agency.

Contact us today to learn more and check back for the next installment of the top 5 reasons the CRA denies Disability Tax Credit applications!