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Understanding Disability Benefits In Canada

By Expert Author: Cameron Callum

In addition to lowering taxes, qualifying for tax credits can also be a requirement for applying for other money-saving vehicles such as the Registered Disability Savings Plan.disability benefits in canada are part of the Canada Pension Plan of the Government of Canada given to citizens and lawful residents of the country.These benefits not only provide basic protection to tax payers in case there is a prolonged interruption in the earnings or the earning capacity of an individual due to a permanent or prolonged disability, they also provide disability tax benefits which offer tax credits to offset the expenses incurred for self or dependents of the tax payer.

If a disability interferes with a person’s capacity to pursue any substantially gainful occupation, disability tax benefits can be availed.

The most important requirement of these very useful disability benefits in canada offered is that the individual must be able to satisfy two essential criteria to qualify for the program. Firstly, he must be a contributor to the Plan and must fit into the definition of disability as officially accepted by the Canada Revenue Agency. The second eligibility criterion refers to the disability. It is necessary for the disability to be severe and prolonged. The severity of a disability is hard to judge and the judgment can be quite arbitrary. As per the CPP Act, a disability is considered severe only if a person is incapableregularly of pursuing any substantially gainful occupation. As the interpretation of severity of disability can be inconsistent many times ‘real life’ circumstances relatedto inability to work are taken into account.

Disability benefits Canada under the CPP are fully indexed and taxable benefits. They are paid monthly after 3 months following the month when the contributor was disabled. Each eligible individual receives a monthly check made of a fixed flat-rate component and a variable component depending on his earning capacity and retirement benefits that he would have got.

Disability tax benefit

Disability Tax Creditor DTC is a non-refundable tax credit that Canadian citizens and in many cases legal residents of Canada can get when the individual suffers from severe and prolonged impairment in physical or mental functions. An application can be made to the CRA and claims can be made for the back 10 years.

If the person with the disability does not have a taxable income the can DTC can be transferred to a supporting relative such as a parent, grandparent, child, grandchild, aunt, uncle, niece nephew who can use this disability tax benefit.

Cameron Callum is the author of this article and writes articles for his own website. For further details disability benefits in canada and disability tax benefits please visit the website.

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