In Ontario, only 3% of caregivers receive any form of supplementary income. Examples of this type of income include social assistance or welfare, child tax benefits, workers’ compensation or tax credits and deductions. The 3% is a startling number when one takes a moment to consider the time, effort, and money required to care for somebody with a disability. When a family caregiver misses out on these tax credits and other forms of assistance, it means that their budgets are often stretched beyond their means. The benefits and tax credits that they could be eligible to receive are essential for offsetting expenses like medications, therapy and even non-medical expenses such as the cost of transporting people they care for to and from appointments with their doctor.
It is also worth noting that many caregivers have made one of the greatest sacrifices of all – they have stopped working in order to stay home and care for a disabled loved one. So, on top of the extra expenses resulting from the needs of the disabled family member, they also have to deal with a significant loss of income. This can be more than just overwhelming – it can be downright crippling for many families. If you are a caregiver and you would like to know more about tax credits and benefits, the following three options are the best place to start.
Disability Tax Credit
The Canadian Disability Tax Credit is designed to help those with disabilities or an eligible family member by reducing the amount of income tax paid. If the dependant qualifies for this credit but they fail to claim the full amount, the balance can be transferred to an eligible family member. There are specific conditions that need to be met in order for a caregiver to qualify and these are outlined by the CRA.
Canada Caregiver Credit
This is also known as CCC and it has replaced the Family Caregiver Tax Credit as of 2017. This credit can be claimed by those who are caring for a spouse, common-law partner, or an extended family member with a mental or physical disability. Like other tax credits and benefits, certain criteria must be met. In this case, you could qualify if your disabled dependent relies on you for consistent and regular necessities including food, clothing, shelter, and so on. The amount you will receive depends on the relationship between the caregiver and their dependent, their income and whether or not any other tax credits are being claimed.
Medical Expense Tax Credit
If the medical expenses of the disabled person exceed a certain percentage of the net income (in 2018 it was 3%), the caregiver may qualify for this tax credit. Examples of medical expenses include medical practitioner fees (doctors, dentists, psychologists, speech-language pathologists, dieticians, etc.) and added expenses (ambulance fees, hearing aids, eyeglasses, service animals, home renovations, and so on).
These are just three of the top options from which to choose. There are a number of other benefits available depending on the age of the disabled dependent. Children may enjoy benefits to help pay for school supplies and educational needs, for instance. It’s also worth mentioning that the Canadian Disability Tax Credit often makes the greatest financial impact at the end of the day and, in many cases, applying for additional credits will depend on being approved for this tax credit.
Applying for a Disability Tax Credit involves a fair amount of paperwork and it can be particularly confusing if this is your first time. At Tax Benefits Canada, our team understands the application process, which allows us to offer professional assistance and advice. Call us at +1 (855) 413-6971 for more information and to get started with your application.