Eldercare/CA PrimePlus Services - 2005
Part 1/2 - Disability Supports Deduction

By Anne Chun, C.A., CFP

In part 2 of our 2004 series of articles, we discussed Attendant Care Expenses. In the March 23, 2004 federal budget, there was a proposed change. Legislation to implement this was introduced on September 16, 2004. At the time of writing, the legislation has not yet been passed, but it will be eventually and will apply to the 2004 taxation year.

Under the proposed legislation, the Attendant Care Expenses deduction on line 215 will be replaced by the Disability Supports Deduction.

The Disability Supports Deduction has a number of major differences and is more "generous":

  • Previously, to claim the Attendant Care Expenses, one has to be eligible to claim the Disability Tax Credit (discussed in part 3 of our 2004 series of articles on Eldercare/CA PrimePlus Services). For the Disability Supports Deduction, you no longer need to qualify for the disability amount to be eligible, unless you are claiming part-time attendant care expenses. For the most part, the eligible expenses are likely to be incurred by persons who have a mental or physical impairment and will assist them to work, go to school or do research. Persons with a learning or perceptual disability may be able to benefit from this deduction.
  • Previously, the maximum amount was limited to two-thirds of your "earned income". The maximum amount of Disability Supports Deduction is calculated differently and does not "discriminate" against persons with no "earned income". See discussion below.
  • The list of eligible expenses has been expanded. See detailed discussion below.

Conditions for claiming the Disability Supports Deduction:

  • You paid expenses for your disability supports, and
  • No one has claimed the payments as Medical Expenses Tax Credit (discussed in part 4 of our 2004 series and will be updated in part 2 of our 2005 series of articles on Eldercare).
  • You must have paid the expenses for care in Canada. If you are a factual or deemed resident of Canada and lived outside Canada for part or all of the year, expenses that are paid to a non-resident person for services provided outside Canada also qualify.

Eligible expenses include the following-some require a prescription or written certification by a medical practitioner and require that the providers to be persons in the business of providing such services:

  • Sign-language interpretation services for individuals with a speech or hearing impairment.
  • Real-time captioning services for individuals with a speech or hearing impairment.
  • Teletypewriters or similar devices for individuals with a speech or hearing impairment to receive or make telephone calls.
  • Devices designed for a blind person to operate a computer such as a Braille printer or large-print on-screen device.
  • Optical scanners or similar devices that allow blind persons to read print.
  • Electronic speech synthesizers that enable individuals with a speech impairment to communicate with a portable keyboard.
  • Note-taking services for individuals with mental or physical impairments.
  • Voice-recognition software for individuals with a physical impairment.
  • Tutoring services for individuals with a learning disability or mental impairment.
  • Talking textbooks for individuals with a perceptual disability who is also enrolled in a secondary school in Canada or designated educational institution.
  • Amounts paid for full-time attendant care services provided in Canada, for individuals with a mental or physical infirmity. Only individuals who qualify for the disability amount can claim amounts paid for part-time attendant. Amounts paid for attendant care services provided by your spouse or common-law partner, or to individuals under 18 years of age do not qualify.

The Tax Deduction is a function of the following variables:

  • Total eligible expenses (discussed above).
  • Net income.
  • Number of weeks in the year that you attended the institution or school--$375 per week is allowed.

Form T929 takes you through the calculation in details. In brief, the maximum deduction allowed would bring your net income to zero, but if you have no net income or did not attend school, the deduction is nil.

If you do not qualify for a deduction, look into whether someone else can claim these expenses as Medical Expenses Tax Credit. Please refer to part 2 of our 2005 series of articles on Eldercare/CA PrimePlus Services, which will discuss the proposed changes from the federal budget.

* CA PrimePlus Services is a registered trademark of the Canadian Institute of Chartered Accountants. Eldercare/CA PrimePlus Services is a customizable range of financial management services for elderly and disabled persons.

Anne Chun, C.A. CFP is the principal of Anne Chun Professional Corporation, providing financial, tax, estate and Eldercare services. She is also the co-author of "Planning your Financial Future".