e-4993 (Social affairs and equality)

The Government is currently working to implement the Canada Disability Benefit. The federal Budget 2024 provided funding of $6.1 billion over six years, beginning in 2024 to 2025, and $1.4 billion per year ongoing, to the Benefit. This was a historic first step to begin addressing the long-standing poverty amongst working age persons with disabilities.

The goal of the Canada Disability Benefit is to reduce poverty and support the financial security of working-age persons with disabilities. The aim is to fill the support gap between the Canada Child Benefit and Old Age Security and the Guaranteed Income Supplement. The Canada Disability Benefit as announced in the federal Budget 2024 represents an important step that is estimated to reach over 600,000 persons with disabilities. As indicated in Budget 2024, the Government aspires to see the combined amount of federal and provincial or territorial income supports for persons with disabilities grow to be comparable to the support provided through Old Age Security and the Guaranteed Income Supplement. The Canada Disability Benefit is meant to complement the other sources of income and support available to persons with disabilities.

In relation to automatic enrolment for people who are already receiving provincial or territorial disability supports, the Government applied the principle of equity between individuals across jurisdictions. Basing disability eligibility criteria on provincial or territorial benefits could potentially create gaps where someone would qualify for the Canada Disability Benefit in one jurisdiction but not in another. This would go against the idea of the Canada Disability Benefit being a nationwide initiative with national parameters and would make it harder, for example, to smoothly transfer services if someone were to move to a new jurisdiction. Furthermore, according to Section 5 of the Canada Disability Benefit Act an application is required in order to receive the Canada Disability Benefit – “the Minister must, in accordance with the regulations, pay a Canada disability benefit to a person who is eligible for the benefit, applies or has an application made on their behalf, in accordance with the regulations, and meets any other conditions set out in the regulations.” And so, while automatic enrolment is not possible at this time, the Government is committed to ensuring the application process for the Canada Disability Benefit is accessible and as easy as possible, while still ensuring program integrity. Other application options may be considered in the future.

The Disability Tax Credit is proposed to be used to establish disability eligibility for the Canada Disability Benefit. Given that over 500 000 working-age persons with disabilities already hold a certificate, this will ensure the Government maintains a consistent and equal approach across all jurisdictions and streamlines the application process. Using the Disability Tax Credit also avoids adding new complexity to the existing federal disability measures, as it provides a simplified application process and timely implementation (i.e., so a new system to adjudicate disability eligibility does not need to be developed). The Disability Tax Credit is already part of the eligibility criteria for other federal programs (such as the Registered Disability Savings Plan, the Canada Worker Benefit Disability Supplement, and the Child Disability Benefit) and a few provincial/territorial programs (e.g., Newfoundland and Labrador’s Income Supplement Disability Amount, British Columbia’s Home Renovation Tax Credit). Creating new criteria for the Benefit would delay implementation, while potentially increasing complexity and burden on applicants. Considering that provincial and territorial definitions of disability and eligibility criteria vary across the country, a single national set of eligibility criteria for the Canada Disability Benefit will ensure fairness for all Canadians.

The Canada Disability Benefit will be income tested based on Adjusted Net Family Income, consistent with other federal and provincial income-tested benefits. This means that the income of a beneficiary’s spouse or partner will be included in the definition of income if they live together. Couples who share a residence generally care for and support each other, and share certain resources and expenses (e.g., accommodation). However, the proposed Canada Disability Benefit income thresholds and earning exemptions have been set at a higher level for couples, which will help persons with disabilities keep more of their money when they enter a relationship. This balance will help ensure that income testing does not result in full benefits going to people with higher income spouses or partners who are not in or near poverty.  

Through Budget 2024, the Government committed to start making benefit payments in July 2025. Note that, if eligible for the benefit, an applicant will be able to get retroactive payments back 24 months to the time of eligibility (but no earlier than July 2025, which is when the benefit is to launch).

The Canada Disability Benefit is designed to supplement, and not to replace, existing provincial/territorial income support programs for working-age Canadians with disabilities. Currently, the Government is working closely with provinces and territories to better understand and address where there might be any potential interactions between the Canada Disability Benefit and their existing programs/benefits. Provinces and territories play a lead role in providing supports to persons with disabilities and will be critical in the success of the Canada Disability Benefit. At the same time, the insurance industry has also been engaged engaged on the question of potential interactions with the Canada Disability Benefit, with the objective of avoiding clawbacks. Note that, the provisions in private insurance contracts fall under provincial and territorial jurisdiction, and provinces and territories generally do not legislate detailed requirements with respect to the provisions of short- and long-term disability insurance contracts.