These are two separate concepts. Disability. Infirmity. One does not preclude the other, but one does not require the other. You may be blind, but not in the least infirm. You may be infirm, but not meet the definition of disability. These two concepts spawn various other tax expense and tax credit claims as well as programs. It's very necessary to differentiate between them because of those other programs, credits and expenses.
First some abbreviations
- CRA is Canada Revenue Agency
- ITA is Income Tax Act
- QP is Qualified Practitioner (as in medical)
- DTC is Disability Tax Credit
I spent five years (2005 to 2010) serving on the Disability Advisory Committee, advising CRA Benefits Administration on disability administration, specifically dealing with S. 118 of the ITA. At one point, I read S. 118.2(2) out loud to ~ 30 people, 12 on the committee and the rest from CRA, Finance and HRDC. We talked about each section for over 2 hours. That meeting totally changed how CRA communicates about medical expenses, and attendant care, and how they now list the over 150 medical expenses found in S. 118.2(2) and Regulation 5700 of the ITA in RC4064. It's why the RC4064 guide has the title it has. CRA hadn't really considered the link between tax credits, including disability and medical expenses. The old General Guide read.. some common medical expenses are, and listed about 3 of the 150 in the ITA.
There is very distinctive difference in how the Income Tax Act treats and discusses disability, which is always referred to using the specific words "one or more severe and prolonged impairments in physical or mental functions". The title of ITA S. 118.3 is Credit for mental or physical impairment and this impairment must be certified in writing by prescribed form (T2201)
On the other hand, when the ITA discusses situations where it refers to infirmity, using that word, or some variation on it and there is NO prescribed form. All that's required is a QP's letter.
There are specific sections of the ITA that reference one or the other for various reasons. Disability (impairment) and infirmity are NEVER referenced together in the Income Tax Act, and that's because they are NOT same thing. Disability is its own credit, with its own form, T2201.
How can you tell? Every program that requires disability status, impairment in function, will specifically refer to S. 118.3 in the wording of that section.
Here's a list of the credits or programs I've found where the disability amount in S. 118.3 is specifically referenced:
S. 63(3) the bump up to $10,000 for the annual child care expense, S. 64 Disability supports, S. 118.2(2)(b), (b.1), (b.2), (l.9) are all medical expenses that specifically require the S. 118.3 disability amount, S. 118.6(3) education, tuition & textbook tax credit for part-time students, the age waiver for RESP's in S. 146.1(2.2) and for part-time enrollment in S. 146.1(2)(g.1), the First time home buyer amount for disability home purchase in S. 118.05, and the Home buyers plan, S. 146.01(1), the refundable disability child tax benefit in S. 122.61(1), the Fitness credit and the Arts Credit for the extra $500 if the parents spent $100 in S. 118.03(2.1) and S. 118.031(3) and the RDSP in S. 146.4 and the supplements to Refundable Medical Expense Supplement and WITB relating to the disability amount in S. 118.3.
Infirmity, on the other hand, isn't defined in the ITA, and it therefore, takes it meaning from the dictionary. I've only ever found one obscure reference to a definition of infirmity in an out of date Charities policy guide on dealing with the 'aged' where infirmity is defined as weak, feeble, frail, much like the dictionary. Believe me, I've searched for a definition for about 10 years now ever since I heard Tom Devaney talk about it in a workshop on tax in Burnaby.
Infirmity is what the new Family Caregiver Amount FCA is all about. Infirmity, which was previously mentioned in some of the credits, notably the caregiver amount for over 18 relatives, and the infirm over 18 credit, now that we have the FCA, requires documentation by a doctor, a qualified medical practitioner, and there are many QPs (qualified practitioners), listed specifically by type in the ITA who can write these letters.
There are also other words used in the ITA that describe various conditions, including handicap, mental or physical impairment, which is not the same as disability because it's not referring to S. 118.3 specifically, and doesn't require severe or prolonged impairment, and there are a number of programs that depend on the definition of infirmity for their criteria including:
Infirm beneficiary for an exempt foreign trust S. 94(1), Infirm dependent S. 118(1)B(d) and (e) which is the top up provision for dependents, the preferred beneficiary election in S. 108(1)(a)(ii)(A), Child care expenses transfer to higher income spouse when lower-income spouse is infirm in S. 63(3), Medical expenses in S. 118.2(2) (c) full-time attendant at home, (d) nursing home (e) school, institution, (g) & (h) transportation / travel, (l.2) renovations or new construction, (l.8) & (l.9.1) caregiver training & tutoring, part-time education amount and now the new Family Caregiver Amount for spouse, child, wholly dependent relative, caregiver, infirm over 18.
Nowhere in the ITA does the new FCA reference disability, yet, the newest release of the RC4064 guide has included the FCA under claims for a person with an impairment in physical or mental functions. It's as if who ever re-wrote the guide was trying to combine disability and infirmity into one category. I don't believe you can do that.
Why? The ITA must be taken as written, with attention paid to content, context and purpose, there's even a Supreme Court case that tells us how to read the ITA in light of its content, context, and purpose. Not even CRA can re-write the Act by issuing guides that are not interpreting the Act correctly.
The best document to describe the personal tax credits is the TD1. Note that the disability amount isn't one of the credits where you add the infirm amount for the FCA.
If you want an in-depth reading list of materials on this topic, I have several web pages of accumulated links that I reference all the time,
http://www.taxdetective.ca/links.html
http://www.taxdetective.ca/ptc.html
and if you are with an accounting or investment advisor firm, and want an in-depth session where you can ask questions, and discuss cases in your own boardroom, I do online presentations via GoToMeeting, and for this topic, it's a minimum 3 or 4 hours to review the credits, the DTC, infirmity and medical expenses plus programs, and how credits are transferable, and apportioned between taxpayers, call me for a quote.
604-943-7414
Eileen Reppenhagen, CGA
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