Disabled Canadians could be waiting months for money owed by Canada Revenue Agency

More than half of Canadians with diabetes who were rejected for the disability tax credit (DTC) between May and December last year have now been approved — a clear indication, critics say, that the Canada Revenue Agency was applying the eligibility rules improperly.

However, most of those whose DTC rejections were overturned are still waiting for the money they're owed. And they've been told the wait could be up to 30 weeks, said Kimberley Hanson, director of federal affairs for Diabetes Canada.

"So it's a real burden for many people with all forms of disability, including diabetes, to be without that money," she said.

"This is money that is the difference between Canadians with disabilities being able to care for and protect their health and not (doing that)."

Many disabled Canadians, including people with diabetes and autism, noticed a spike in DTC application rejections by the CRA last year between May and December 2017.

It turned out that the agency had quietly changed how it applied the eligibility criteria.

The public backlash led to National Revenue Minister Diane Lebouthillier announcing in December that there would be a review of rejected applications under the life-sustaining therapy category, which mostly covers diabetics.

The agency reviewed 2,267 of the rejected applications and subsequently approved 1,326 of them, according to the CRA.

The agency continues to reject the remaining 941 applications. Hanson said that troubles her.

"We're hearing from hundreds of Canadians who have been rejected, sometimes really cruelly, hearing from analysts at the CRA that they're 'just not disabled enough,'" she said.

Following media reports on the spike in rejections, the Senate committee on social affairs decided to study problems with the government's two principal support programs for people with disabilities: the DTC and the Registered Disability Savings Plan.

Canadians cannot qualify for the savings plan unless they also qualify for the tax credit.

A spike in rejections

Senators released their report Wednesday. It concludes that 2016-2017 saw almost 15,000 more DTC rejections than the year before.

The committee heard from Lebouthillier and officials from CRA, Employment and Social Development Canada and the Department of Finance.

"We still don't understand why there were so many rejections. We still haven't figured that out," said Sen. Jim Munson.

The report concluded that the federal government's disability support programs need a major overhaul.

"The Canada Revenue Agency was found to have applied the eligibility criteria for the disability tax credit inequitably and unfairly," said Sen. Judith Seidman.

"Someone with a physical disability has an easier time qualifying for a credit than someone with a mental disability. It's hard to imagine that's the way the program is supposed to work."

The report makes 16 recommendations calling on the federal government to, among other things, simplify the application process and clarify eligibility criteria to make them much more transparent for people appealing decisions.

"People aren't told why their application is rejected," said Sen. Art Eggleton, who chairs the Senate social affairs committee.

"They can't get the kind of information that they need to be able to appeal it properly."

Tax collectors aren't experts in disability: Eggleton

The senators also argue the government needs to embrace a philosophical shift in how it treats Canadians with disabilities.

Eggleton said the CRA might be responsible for administering the program, but its agents should not pretend to be experts on disabilities. Instead, he said, they should consult with the ministries of Health and Employment and Social Development.

"Those people have a greater sensitivity and understanding of the needs of disabled people than perhaps the tax collectors do," said Eggleton.

John Power, a spokesperson for Lebouthillier, said the minister is reviewing the Senate committee's report and will respond to its recommendations.

He said the CRA has taken steps to ensure the DTC rules are applied correctly and consistently and that each case is unique, as is the time required to process an adjustment.