Medical Practitioners: Learn more about eligibility changes for the DTC

Transcript

Disability Tax Credit for medical practitioners

Stefan: Welcome and thank you for joining us for a presentation by the Canada Revenue Agency (CRA) on the Disability Tax Credit, commonly referred to as the DTC.

Today’s presentation is meant for medical practitioners and covers the recent legislative changes to the criteria for mental functions and life-sustaining therapy.

My name is Stefan Goolcharan and I’ll be your host for this session.

[A seated individual is being comforted by their caregiver.]

Land Acknowledgement

Stefan: I wish to acknowledge that the lands on which I am presenting from are part of Treaty 1 territory of the Anishinaabeg, Cree, Oji-Cree, Dakota, and Dene Peoples, and the homeland of the Métis Nation.

I also want to acknowledge the lands on which you are gathered from coast to coast and invite you to take a moment of silence to have a thought for the territory in which you find yourself.

Overview

Stefan: This webinar for Medical Practitioners will focus on the revised legislation that impacts the criteria for the mental functions and life-sustaining therapy (LST) categories for the disability tax credit.

We will be referring to the credit as the DTC throughout the presentation.

Form T2201 is a two-part form. Part A is completed by the patient (or their legal representative) and Part B is completed by the medical practitioner. Today, we will focus on the changes in Part B of the form that affect Mental functions and LST.

We will review the expanded criteria and how the paper and digital applications were updated.

We will cover some frequently asked questions.

Legislative changes

Stefan: Revised legislation expanding the criteria for the mental functions and life-sustaining therapy categories became law on June 23, 2022.

This expanded criteria means more Canadians will be eligible for the DTC.

These legislative changes are retroactive to January 2021.

Mental functions necessary for everyday life

Stefan: Let’s take a look at the changes for mental functions…

[Two individuals are holding a dog and smiling at their laptop.]

Mental functions - Legislative changes

Stefan: The definition of mental functions was expanded to better articulate the range of mental functions necessary for everyday life.

It now includes:

• Adaptive functioning
• Attention
• Concentration
• Goal-setting
• Judgment
• Memory
• Perception of reality
• Problem-solving
• Regulation of behaviour and emotions
• Verbal and non-verbal comprehension

The following eligibility criteria remains unchanged:

A person is markedly restricted if they are unable to perform mental functions necessary for everyday life, or they take an inordinate amount of time compared to someone of similar age who does not have the impairment (even with appropriate therapy, medication, and devices) and this is the case all or substantially all of the time.

Mental functions category - changes to paper Form T2201

Stefan: Let’s look at the paper form T2201, Mental functions necessary for everyday life section:

The first page (questions 1-4) collects the same information as the 2021 version of the form:

• condition/diagnosis
• medication taken (and efficacy)
• devices and therapy used, and
• support received

[A full page view of page 11 of the T2201, Disability Tax Credit Certificate.]

Mental functions category - changes to paper Form T2201 (continued)

Stefan: The second page (question 5) includes the subcategories.

• Adaptive functioning
• Attention
• Concentration
• Goal-setting
• Judgment
• Memory

Attention and Concentration are new additions to the Income Tax Act.

Formerly “taken together”, Goal-setting, Judgment and Problem-solving are now assessed individually.

Medical practitioners are asked to select the examples, which are listed in each subcategory, that apply to their patient, and indicate the degree of limitations.

If required, additional examples or details can be provided under “Other”.

[A full page view of page 12 of the T2201, Disability Tax Credit Certificate.]

Mental functions category - changes to paper Form T2201 (continued)

Stefan: The third page (question 5, continued) includes the remaining subcategories of mental functions

• Perception of reality
• Regulation of behaviour and emotions
• Verbal and non-verbal comprehension
• Problem-solving

Again, medical practitioners are asked to select the degree of limitation for each of the subcategories.

Perception of reality, regulation of behaviour and emotions, and verbal and non-verbal comprehension are new additions to the Income Tax Act.

Questions 6-8 collect the following information:

• The patient's ability to perform mental functions necessary for everyday life
• The prolonged nature of the impairment
• When the impairment started; and
• Whether improvement is expected

[A full page view of page 13 of the T2201, Disability Tax Credit Certificate.]

Mental functions – digital application changes

Stefan: The digital application of Form T2201 on Canada.ca was updated to reflect the revised legislation.

The section referring to the impairment in mental functions will be similar to the paper form. Medical practitioners will have a consistent experience across both versions.

[A screenshot of the “Examples of limitations in mental functions” section in the T2201, Disability Tax Credit Certificate digital application.]

Example of how to complete a T2201 under category: mental functions necessary for everyday life

Stefan: Let’s review the mental function category of the updated Form T2201 using a fictional scenario.

[Two individuals smiling at each other while outdoors.]

Mental functions necessary for everyday life - Question 1

Stefan: Maia is a child who has Autism Spectrum Disorder (ASD).

Question 1 asks about the medical condition. Here, the medical practitioner has indicated the diagnosis which was confirmed in 2019. The level of Autism Spectrum Disorder, if known, can also be added here.

[A snippet of question 1 of the “Mental functions necessary for everyday life” section on the T2201, Disability Tax Credit Certificate with a sample response. A yellow arrow also highlights and area for medical practitioners to check off.]

Mental functions necessary for everyday life - Questions 2 & 3

Stefan: Question 2 asks about any medication your patient takes. Here, the medical practitioner has indicated that Maia does not take medication.

When completing the medication section for your patient, it is important to indicate whether your patient requires supervision and the effectiveness of the medication.

Question 3 asks about any therapies and devices your patient requires to support their functioning. Maia requires several therapies, including Applied Behavioural Analysis Therapy, Speech Language Therapy, and Occupational Therapy.

[A snippet of questions 2 and 3 of the “Mental functions necessary for everyday life” section on the T2201, Disability Tax Credit Certificate with a sample response.]

Mental functions necessary for everyday life - Question 4

Stefan: Question 4 asks about support and supervision.

Maia requires adult supervision at home beyond an age-appropriate level and additional support from educational staff at school at all times.

[A snippet of question 4 of the “Mental functions necessary for everyday life” section on the T2201, Disability Tax Credit Certificate with a sample response.]

Mental functions necessary for everyday life - Question 5

Stefan: For question 5, the various subcategories of mental functions are provided and examples of effects of impairment are listed below each subcategory.

For this section, select the degree of limitation that is specific to your patient. These include no limitation, some limitations or very limited capacity.

When completing this chart you are comparing your patient to someone of a similar age who does not have an impairment in mental functions.

Under “Other”, additional information can be provided that supports your patient’s eligibility.

Additional information can help the CRA determine your patient’s eligibility and can reduce the need for further clarification.

In our scenario, Maia’s limitations are in adaptive functioning, attention, and concentration.

[A snippet of question 5 of the “Mental functions necessary for everyday life” section on the T2201, Disability Tax Credit Certificate with a sample response.]

Mental functions necessary for everyday life - Question 5 (continued)

Stefan: This slide is a continuation of question 5. The medical practitioner included additional information for judgment and problem-solving under “Other”.

For judgment, Maia has no awareness of their surroundings and this threatens their safety.

For problem-solving, Maia lacks the social understanding necessary to grasp why individuals are sad, hurt, or upset.

[A continued snippet of question 5 of the “Mental functions necessary for everyday life” section on the T2201, Disability Tax Credit Certificate with a sample response.]

Mental functions necessary for everyday life - Question 5 (continued)

Stefan: Maia also has limitations in regulation of behaviour and emotions and in verbal and non-verbal comprehension. The medical practitioner provided specific examples under “Other”.

The check boxes, along with the additional comments, are all effects of impairment which CRA considers when reviewing eligibility for the DTC.

[A continued snippet of question 5 of the “Mental functions necessary for everyday life” section on the T2201, Disability Tax Credit Certificate with a sample response.]

Mental functions necessary for everyday life - Question 6

Stefan: Question 6 asks the medical practitioner to provide information on their patient’s ability to perform the mental functions necessary for everyday life.

In Maia’s scenario, the medical practitioner indicated that they are unable to perform these functions on their own or it takes an inordinate amount of time, all or substantially all of the time, compared to someone of similar age without an impairment in mental functions.

[A snippet of question 6 of the “Mental functions necessary for everyday life” section on the T2201, Disability Tax Credit Certificate with a sample response.]

Life sustaining therapy

Stefan: That concludes our discussion on mental functions. Next we will take a look at life-sustaining therapy.

[An individual having their blood pressure checked.]

Life sustaining therapy - Legislative changes

Stefan: Changes include the following:

• The frequency of therapy required has been reduced to be at least twice a week (For 2020 and previous years, therapy is required to be at least three times per week).
• The list of activities that can be counted toward the 14-hour requirement has been expanded and will be covered in the next few slides.
• Individuals with type 1 diabetes are now deemed eligible retroactive to January 2021 and meet the criteria for life-sustaining therapy. This means that medical practitioners are not required to provide the frequency of therapy or list the activities that support the 14-hour requirement.

These legislative changes are retroactive to January 2021.

Life sustaining therapy - changes to paper Form T2201

Stefan: Let’s look at the paper form T2201 Life-sustaining therapy section.

At the top of this section, eligibility criteria for life-sustaining therapy are defined as:

• therapy is needed to support a vital function
• therapy is needed at least 2 times per week (for 2020 and previous tax years, the therapy is needed at least 3 times per week)
• therapy is needed for an average of at least 14 hours per week, taking time away from everyday activities
• and, the impairment has lasted or is expected to last for a continuous period of 12 months

The table outlining examples of eligible and ineligible activities has been updated to reflect the revised legislation.

Next, the following information is collected: type of therapy, medical condition, activities required for therapy, frequency of therapy and time dedicated to administer therapy.

For patients with a diagnosis of type 1 diabetes whose therapy began in 2021 or later only questions 1, 6, 7, and 8 need to be completed under the Life-sustaining therapy section.

[A full page view of page 15 of the T2201, Disability Tax Credit Certificate.]

Life sustaining therapy – digital application changes

Stefan: In the digital application, the life-sustaining therapy section retains the same format as the current version.

Help text has been added when a medical practitioner selects a diagnosis of Type 1 diabetes to reflect the updates to the Income Tax Act.

[A screenshot of the “Type of therapy” section on the T2201, Disability Tax Credit Certificate digital application.]

Life sustaining therapy – digital application changes

Stefan: The list of activities related to life-sustaining therapy has been updated to reflect the revised legislation.

[A screenshot of the “Activities related to life-sustaining therapy” section on the T2201, Disability Tax Credit Certificate digital application.]

Examples of eligible activities that count toward the 14 hour requirement

Stefan: Here are some examples of eligible activities that count toward the 14-hour requirement for the life-sustaining therapy category. We will focus your attention on those recently added which include:

• Where the therapy requires daily consumption of a medical food or medical formula, activities directly related to calculating the amount of a compound that can be safely consumed can be counted towards time spent on therapy
• Activities related to dietary or exercise restrictions or regimes can be counted towards the time spent on therapy, when directly related to the determination of the dosage of medication
• Medical appointments where the daily dosage of medication, medical food or medical formula is determined
• If medically required, recuperation after therapy can be counted towards time spent on therapy
• Time spent by another person to assist in performing activities related to therapy due to physical or mental impairment

Please note that this list is not exhaustive.

[A chart highlighting 7 examples of eligible activities that count toward the 14-hour requirement.]

Examples of activities that do not count toward the 14 hour requirement

Stefan: On this slide is a list of activities that are not eligible towards the 14-hour requirement.

Please note the following:

• Time spent eating or exercising does not count toward the 14-hour requirement; however, time spent on the activities of blood glucose monitoring and logging, which are directly related to dietary intake and exercise, are eligible when they are required to determine the daily dosage of a medication.

Again, this list is not exhaustive.

[A chart highlighting 7 examples of activities that do not count toward the 14-hour requirement.]

Example of how to complete Form T2201 under the category: life sustaining therapy

Stefan: Let’s review the LST section of the updated Form T2201 using a fictional scenario.

[An individual supports another using a cane while walking outdoors.]

Life sustaining therapy

Stefan: Amon is 30 years old, was diagnosed with Type 1 diabetes and requires insulin. Per the revised legislation, persons having a diagnosis of Type 1 Diabetes are deemed to have met the criteria for life-sustaining therapy. Therefore, Amon meets the eligibility criteria for 2021 and future years.

[A snippet of question 1 of the “Life-sustaining therapy” section on the T2201, Disability Tax Credit Certificate with a sample response.]

Life sustaining therapy (continued)

Stefan: Amon was diagnosed with Type 1 Diabetes in 2010.

Eligibility criteria for 2020 and previous years required that therapy be administered 3 times per week, for an average of 14 hours and that the eligible activities be provided and certified by the medical practitioner.

To be considered eligible for 2020 or before, medical practitioners must provide information for questions 2-5. As this slide shows, Amon meets the DTC criteria for life-sustaining therapy and is eligible for the DTC from 2010 on a permanent basis.

When completing form T2201 for a patient with Type 1 Diabetes for 2021 or later years, skip to question 6.

[A snippet of questions 2-8 of the “Life-sustaining therapy” section on the T2201, Disability Tax Credit Certificate with a sample response.]

Frequently asked questions

Stefan: We are near the end of today’s presentation, but before we go, we would like to go through some of the most common questions that we get from medical practitioners. Here they are.

[Three wooden cubes with a question mark on each.]

Question #1

Stefan: Question 1: What are you looking for when you ask for the date the limitations began on Form T2201?

Question #1

Stefan: In the case of a marked restriction, the date we are looking for is the year when your patient’s limitations began to meet the criteria of being unable or taking an inordinate amount of time, all or substantially all of the time, to perform a particular category of impairment (also referred to as a basic activity of daily living).

This is not necessarily the date of diagnosis. Rather, it’s the date when the limitations meet the criteria of the particular category in the legislation.

Question #2

Stefan: Question 2: Which diagnoses are eligible under mental functions?

Question #2

Stefan: To be eligible for the DTC, a patient must have a severe and prolonged impairment, which meets specific criteria.

DTC eligibility is not solely based on the presence of a medical condition or diagnosis, but rather on the effects of the impairment on a person’s ability to perform the mental functions necessary for everyday life.

Given the fact that the severity of the functional limitations may vary from person to person within the same diagnostic category, all DTC applications are examined on a case-by-case basis.

Question #3

Stefan: Question 3: How do I complete the DTC application for a patient I rarely see?

Question #3

Stefan: Complete the application using the medical information you have on file and discuss the questions on the form with your patient as needed. Include details or examples when possible that are specific to your patient.

You can also include reports that you feel will be helpful.

Question #4

Stefan: Question 4: Is travelling to receive life-sustaining therapy considered part of the 14-hour requirement?

Question #4

Stefan: No. The time spent on travel to receive therapy cannot be counted towards the 14 hours. Only the time to receive the therapy is counted.

Question #5

Stefan: Question 5: Is time for recuperation now included for patients who require life-sustaining therapy?

Question #5

Stefan: Yes. When medically required, recuperation after therapy can be counted towards the time spent on therapy.

Question #6

Stefan: And for our last question. A few of my patients received a notice saying that they were not eligible for the DTC. However, after having seen the new criteria for mental functions and life-sustaining therapy, I think some of them might be eligible. Does a new form T2201 have to be completed?

Question #6

Stefan: There is no need to complete a new form T2201. In Fall 2022, the CRA will be reviewing disallowed applications that were received between January 1, 2021 and June 23, 2022 under mental functions and life-sustaining therapy. Applicants affected by the updated eligibility criteria can expect to be informed of the outcome of the review by the end of December 2022.

DTC resources for medical practitioners

Stefan: The CRA’s website canada.ca/disability-tax-credit provides more information about the disability tax credit, including:

• A self-assessment tool, which helps individuals determine if they or their dependant may be eligible for the DTC.
• The DTC application form
• And a guide to help individuals navigate the DTC process and other related tax credits

The CRA has a dedicated toll-free phone line for medical practitioners who have questions about the DTC or who need help filling out the form: 1-800-280-2639.

Patients, who have DTC questions, may call 1-800-959-8281 or TTY: 1-800-665-0354

Thank you

Stefan: Thank you for joining us for this presentation. We hope the information presented will answer some of your questions about the revised legislation.

[Four individuals looking at a computer monitor together.]