Navigating the Disability Tax Credit for Mental Health Conditions

Healthy minds support a healthy life, helping people perform their tasks effectively. However, performing everyday mental functions can be challenging for some people, even with appropriate therapies, medication, and devices. These challenges can impact their ability to work, maintain relationships, and manage daily responsibilities.

Disability Tax Credit offers help to these individuals by reducing their income tax. In this guide, we will explore the nitty-gritty details of navigating mental illness and DTC. So, without any further delay, let’s begin exploring!

Why is DTC Important for Those with Mental Health Conditions?

DTC offers a tax break for adults who work while struggling with disabilities or those who look after somebody with a disability. Aside from taking the tax break benefits in the future, eligible persons can also claim DTC retroactively for the past 10 years. With DTC, one can open a Registered Disability Savings Plan. It’s a long-term saving plan enabling the person with disabilities to save up to $200,000 in this account and receive up to $90,000 in grants and bonds in their lifetime.

Additionally, any money deposited and withdrawn from the RDSP doesn’t qualify as income. So, those with disabilities can save for their future while receiving provincial and federal disability benefits. It’s a game-changer for such people, as their lives can be at much ease.

DTC Mental Health Eligibility Criteria Checklist

Eligibility for DTC is purely based on the effects of impairment, not the diagnosis or presence of a medical condition. If you are struggling with severe and prolonged impairment, restricting your ability to perform certain mental functions, you may fall eligible for DTC. The three must-meet criteria for eligibility include:

• You cannot perform mental functions that are necessary for everyday life, or it takes you three times longer than those who don’t have any impairment (even with appropriate medication, therapy, and devices).
• Your impairment has lasted or is expected to last for a continuous span of at least 12 months.
• Your impairment is present all or almost all of the time (generally 90% or more).

Note that if you feel like you are not eligible for DTC, you can still send your application. CRA will analyze your eligibility based on the information provided by your medical practitioner. Additionally, if you have impairments in two categories, you may be eligible for the DTC under the cumulative effect of significant limitations. This combines the impact of two limitations, equating them to a marked restriction in one category (excluding life-sustaining therapy).

General Application Tips

The following are some general application tricks that you might consider when filling in the application form, say for Disability Tax Credit for depression.

• Be sure to fill only those sections that are relevant to your disability. If a disability doesn’t affect a specific domain, you may leave the section blank or cross it.
• Specify when the patients became disabled to help them claim credits retroactively.
• Mention less severe disabilities in the “Cumulative effect of significant restriction” section.
• Offer detailed information in the Effects of Impairment section, accurately explaining the nature of restrictions you experience. The more detailed your information is, the lesser the chances there will be of additional follow-up information requests.

Effects of Impairment

It’s the most crucial section for all applicants. Include the patient’s relevant diagnosis and emphasize how the impairment affects daily functionality. Your Effects of Impairment section must include the following points:

Activity Impacted: For instance, goal setting, problem-solving, memory, judgment, or adaptive functioning (health and safety needs, self-care, social functioning, management of finances, etc.).

Examples: You may explain some real-life scenarios where you experienced the effects of impairment.

Frequency: Point out how often you get inhibited in managing these activities compared to a person of a similar age with no impairments.

Required Assistance: Do you require any assistive devices? Do you need help with daily activities? Do you need any sort of supervision to ensure safety or ensure they have taken medication?

To be more specific, your section can include answers to the following questions:

• What is the patient’s diagnosis, and how does their condition limit them?
• How frequently does this condition affect the patient? The disorder itself, rather than its symptoms, must be present the majority of the time and cause a significant functional restriction.
• Does the patient require assistance with daily activities? Do they use any assistive devices?
• Can you provide an example from the patient’s life that illustrates how this restriction affects them?
• Does the patient need supervision to ensure their safety or to help them remember to take medication?
• In what ways has the patient’s social ability been affected by their condition?

Lastly, avoid any sort of irrelevant information. Do not mention your ability to work, manage your bank account, drive, housekeep, or engage in any sort of recreational activity.

Wrapping It Up!

Disability Tax Credit offers a tax break to those struggling with performing daily life activities. If you are struggling with a mental health condition, you can also fall eligible for DTC. No doubt, navigating the DTC process for mental health conditions seems overwhelming, but with the right information, it becomes much more manageable. Complete your application cautiously, and mention all the necessary details while focusing on how the impairment affects your daily life. You can even offer example scenarios. With all the tips and instructions mentioned in the guide above, you can significantly improve your chances of successful claiming. Hope you find this info worth reading. Stay tuned for more.