HUMA Committee Report

RECOMMENDATION 6

The Committee recommends that the CCRA and the Department of Finance take immediate steps to consult widely to develop amendments to the Income Tax Act (see Recommendation 4), a better DTC application process and application form. This consultation should include representatives of organizations concerned with various types of disability, representatives of professional groups of medical practitioners qualified to certify eligibility for the DTC, and the Office for Disability Issues. The consultation exercise should pay particular attention to the need to develop eligibility criteria and an application form that treat mental illness, and cognitive disabilities in an appropriate manner. The CCRA and Department of Finance should submit a written report to this Standing Committee about the nature and results of its consultative process by 1 December 2002.

Government Response:

The response indicates that the CCRA intends to expand its consultation process. Particular attention will be given to clarifying the information required on Form T2201 in relation to mental impairments and to reducing the burden placed on medical practitioners by requests for supplementary information.

Comment:

The CCRA held meetings this summer with groups representing persons with disabilities and HRDC’s Office of Disability Issues. Following these meetings, the CCRA released a draft version, dated 28 August 2002, of the new Form T2201 (see Government Response to Recommendation 5).

RECOMMENDATION 7

The Committee recommends that the CCRA and the Department of Finance establish a joint senior level advisory group to conduct ongoing consultations among senior level officials (including the Office for Disability Issues), advocacy groups, representatives of organizations of professional groups of medical practitioners who complete Form T2201, and individuals. This advisory group should deal with ongoing issues dealing with DTC program administration and effectiveness to ensure that the DTC is meeting its stated purpose and objectives.

Government Response:

According to the government’s response, the initial meetings held by CCRA with persons with disabilities were also first steps in establishing an advisory committee on administrative issues.

Comment:

No mention is made of the Department of Finance’s involvement in these initial meetings or in the ongoing activities of an advisory committee on administrative issues.

RECOMMENDATION 8

The Committee recommends that beginning with the tax year 2002, the government pay the cost for the services of a medical practitioner who provides the CCRA with any additional information beyond completing Form T2201 when this information results in a DTC claim or appeal being granted. This includes any charge for providing CCRA with supplementary information about an individual’s DTC recertification or a medical appraisal for the purpose of appealing the denial of a DTC claim. For greater clarity, applicants or appellants would not be able to claim these costs for providing any additional information beyond a completed Form T2201 until their DTC claim is approved.

Government Response:

No specific response.

Comment:

According to the government’s response to Recommendation 1(b), taxpayers should bear the cost of providing documentation when needed. In addition, some of these costs may be recouped by claiming them as an allowable medical expense when individuals file their tax returns. As noted, this would occur via the Medical Expense Tax Credit which reduces the federal tax of the claimant by 16 per cent of qualifying un-reimbursed medical expenses in excess of $1,678, or 3 per cent of net income, whichever is less. Moreover, according to the government’s response to Recommendation 6, the proposed changes to Form T2201 are intended to reduce the burden of supplementary information requests on medical practitioners.

RECOMMENDATION 9

The Committee recommends that in order to use health-care resources more efficiently and reduce potential costs for DTC claimants, the re-certification process be streamlined to easily identify the instances where an individual’s disability has remained unchanged or worsened.

Government Response:

No specific response.

Comment:

The government’s response does indicate that the CCRA accepts a previous version of Form T2201 provided it contains enough information to determine continued eligibility. It does not state how taxpayers are informed of this policy.

RECOMMENDATION 10

The Committee recommends that the CCRA put in place an information and education strategy and campaign for the 2002 tax year. Prepared in cooperation with the disability community and medical practitioners, this information strategy should:

(a)educate the general public about the purpose, nature and provisions of the Disability Tax Credit;

 

(b)provide information to assist persons qualified to certify individuals’ eligibility for the DTC (particularly those dealing with mental, psychiatric and learning disabilities) to understand the nature of the certification process and the nature of the information required for certification;

 

(c)include a detailed guide for tax preparers, financial advisors and their clients that outlines program eligibility criteria and preliminary steps to enable taxpayers to decide whether or not to apply for the credit.

Government Response:

The response states that the CCRA understands that an informed public is a cornerstone of an effective self-assessment tax system. The CCRA is looking at how it can build on existing information dissemination activities as well as increase awareness and understanding of the DTC. In addition, it will examine the possibility of producing a new document to assist medical practitioners completing Form T2201.

RECOMMENDATION 11

The Committee recommends that the CCRA deal appropriately with appeals by:

(a)including in information materials produced by the CCRA information about the right to appeal for those whose DTC application has been denied. This information should be placed in a prominent position on Form T2201.

 

(b)modifying the appeal procedure for those denied the DTC to accommodate persons with disabilities (for example, extending the time limit). These potential modifications should be discussed and agreed to by the advisory group as mentioned in Recommendation 7.

Government Response:

The response defends the current appeal system.

Comment:

The government does not seem to be prepared to modify the appeal procedure for individuals who are denied the DTC. According to the government’s response, the right to appeal a DTC eligibility decision is communicated to individuals once the decision is made. It is felt that this is the appropriate time to inform individuals of this right (N.B. The proposed Form T2201 does not inform applicants of their right to appeal). The time limit for an individual to launch an appeal is the later of one year from the date the tax return is due to be filed, or 90 days from the mailing of the notice of assessment. In the event that this deadline cannot be met, potential appellants may apply to the Minister of National Revenue for an extension. In the event that the Minister refuses to grant and extension, potential appellants may apply to the Tax Court of Canada for further consideration. The response does not clearly specify how potential appellants are informed of these alternatives.

RECOMMENDATION 12

The Committee recommends that by 1 January 2003, any decision by the CCRA to grant or deny an individual’s application for the Disability Tax Credit be made by a qualified person as set out in the Income Tax Act (118.3(1)(a.2)) (currently a medical doctor, optometrist, audiologist, occupational therapist, psychologist or speech therapist).

Government Response:

No specific response.

Comment:

The response points out that CCRA recognizes the need for competent and well-trained staff. It also states that “the majority of claims for the DTC are easily resolved as the individual clearly either qualifies or does not qualify for the credit.” The inference in this statement is that the T2201 form allows the current staff members (whose precise qualifications are not addressed in the response) to make this determination. When an individual’s DTC eligibility is not clear, the case is referred to CCRA headquarters where it is reviewed by a medical professional (qualifications unspecified) who makes a determination. The government believes that this process is fair, efficient and cost-effective.

RECOMMENDATION 13

The Committee recommends that when the CCRA rejects an application for the DTC, the Agency provide the claimant with a written explanation setting out the reasons that the application has been refused and setting out the applicant’s rights and procedures for an appeal.

Government Response:

No specific response.

Comment:

As mentioned in the government’s response to Recommendation 11, the right to appeal a DTC eligibility decision is communicated to individuals once the decision is made. The government’s response is silent on providing applicants with a written explanation for the decision not to grant eligibility.

RECOMMENDATION 14

The Committee recommends that the CCRA provide all employees who administer DTC with training regarding the nature of disability, the purpose of the DTC, and the administrative challenges in ensuring fair administration. This training should involve members of the disability community and should pay particular attention to the complexities associated with assessing cognitive and mental disabilities.

Government Response:

No specific response.

Comment:

The response addresses this issue in the statement used to respond to Recommendation 12 that the CCRA recognizes the need for competent and well-trained staff. It is confident that individuals who administer the DTC and other tax measures do so in a fair and competent manner. The response does not specify who these staff members are or how their competency is achieved.

RECOMMENDATION 15

The Committee recommends that the Department of Finance conduct a comprehensive evaluation of the Disability Tax Credit and that this evaluation be tabled with the Standing Committee on Human Resources Development and the Status of Persons with Disabilities no later than 31 December 2002.

Government Response:

The Department of Finance will evaluate whether the DTC is achieving its stated policy objectives once new data from the 2001 Participation Activity Limitation Survey (PALS) becomes available in the spring of 2003.

RECOMMENDATION 16

The Committee recommends that the government undertake a comprehensive examination of all the federal tax system’s measures to support persons with disabilities. As a basis for public discussion, the government should prepare and release a paper by 31 March 2003 outlining possible options for reform. This paper should specifically include a discussion of combining tax measures (e.g. the Disability Tax Credit and the Medical Expenses Tax Credit), refundability, and a registered savings plan (with a grant component like the RESP) for children with disabilities who may not be able to benefit from higher education but who require financial support to live.

Government Response:

No response.

Comment:

The response does mention that the government is developing a comprehensive report on federal programs and services for persons with disabilities. This report will look at the outcomes in relation to the goals identified in the reports entitled In Unison 2000: Persons With Disabilities and Future Directions to Address Disability Issues for the Government of Canada: Working Together for Full Citizenship. The report that is being prepared will not analyze the tax system specifically nor discuss combining disability tax measures, refundable tax credits or registered savings plans for children with disabilities.