Most disabled Canadians may not take advantage of all of the disability benefits that are available to them. However, they don't know that the rules and processes for getting in can be different, and the application process could take a long time.
There are a number of benefits for those who qualify for the Disability Tax Credit (DTC). You may be eligible for not only $1,900 to $2,200 each year ($5,500-$6,000 for children), but you could also be eligible for other credits and benefits.
So, would it surprise you to learn that the Disability Tax Credit entitles you to some Canadian disability benefits as well?
1. Child Disability Benefit:
This is a tax-free monthly income supplement for children under the age of 18. The Child Disability Benefit (CDB) can be valued at up to $224.58 per month, depending on the circumstances. It is entirely up to you how you wish to spend it.
CDB, like the Disability Tax Credit, can be repaid up to ten years in advance.2
2. Savings for the Future
Once you've been approved for the Disability Tax Credit, you'll be able to receive it every year after that. The disability tax credit might save you between $1,900 and $2,200 each year. That's a savings of $19,000-$22,000 over ten years.
These figures will not include the additional amount if you're filing a claim on behalf of a child under the age of 18 or if you are eligible for the Canada Caregiver Credit.
If you are using our service, you will get the advantage that we will provide you with all the information you need and also continue to provide you with guidance in the future. Our aim is to keep you updated.
3. Home Buyers' Payments:
If you or a member of your family has been approved for the Disability Tax Credit, you may be able to deduct $5,000 from your taxable income.
If you make changes to your house to make it more accessible to people with disabilities (such as adding a ramp if you have a walking disability), you can also apply for the home accessibility tax credit.
4. Canada Pension Plan-Disability:
If you are approved for the disability tax credit and also made a contribution to the Canada Pension Plan (CPP), then you may get a monthly benefit called the Canada Pension Plan-Disability (CPP-D).
CPP-D is taxable income and is intended to help Canadians who are unable to work on a regular basis due to a handicap. You are not restricted to how to spend it. You are allowed to use this benefit as often as you want.
Since the Disability Tax Credit is intended to reduce taxable income, you can use the DTC to offset the amount of taxable CPP-D you receive.
5. Working Income Tax Benefit Supplement:
If you are already qualified for the Working Income Tax Benefit (WITB), the Disability Tax Credit is a refundable tax credit that enables you to claim the WITB disability supplement.
You can only get these benefits if you've been approved for the Disability Tax Credit.
6. The Canada Disability Savings Bond
- Yearly, the disability savings bond is $1,000 and the lifetime limit will be $20,000.
- Your family's annual income must be less than $45,916.
- You will get a part of the $1,000 disability bond if your family's income is greater than $30,000 but less than $45,916.
7. The Canada Disability Savings Grant
The Canada Disability Savings Grant is a government-funded programme that allows people with disabilities to save money.
- When you make a $500 contribution to an RDSP, the government will double it to $1,500. This can be done once a year.
- If you want to contribute the additional $1,000 to your RDSP, your RDSP will receive a $2,000 contribution from the government.
- As a result, RSDP collects $5,000 per year, from a $2,500 contribution to $3,500 provided by the government. The government of Canada will provide a limit of $7,000 over your lifetime.
8. Caregivers receive a tax credit
Do you provide financial support to a spouse, your common-law partner, or a dependent who has a physical or mental disability? It is the non-refundable tax credit that you may be eligible for. It is the additional credit to the disability credit for that person who does care for their family member who relies on them on a regular basis for basic essentials such as food, housing, and clothes.
9. Additional Benefits:
You are also provided with extra benefits for children, carers, first-time home purchasers, and RESPs. We will look into your eligibility to get these extra bonuses.
10. The Registered Disability Savings Plan (RSDP):
Once you've been approved for the Disability Tax Credit, you will go for the setup of your RDSP. It is a long-term savings plan that offers disability savings grants and bonds, as well as other advantages.
The purpose of establishing the RDSP is to help Canadians who are living with disabilities save money for their future. It's not tax-deductible to put money into an RSDP, but when you take the money out, it can grow tax-free until the funds are withdrawn.
You can also benefit from the Canada Disability Savings Grant, where the federal government contributes up to $3 for every $1 you save – up to $90,000.
If you come from a low-income family, the government will deposit a Canada Disability Savings Bond of up to $1,000 each year (up to $20,000) directly into your RDSP.
Summary
You can go for an RSDP if you have qualified for the disability tax credit and are under the age of 60. It could be better for you to open up an RDSP as soon as possible so that beneficiaries can maximise government and personal contributions.
When you reach 49 years of age, you are no longer eligible for government grants or bonds, so it’s better to start the process as soon as you can!