Cost Estimate for Bill C-399 “Fairness for Persons with Disabilities Act”

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The Disability Tax Credit (DTC) is a non-refundable tax credit for persons with severe and prolonged disabilities.

Most DTC claimants are eligible for the credit based on marked restrictions in their ability to perform the basic activities of daily living. An alternative ground for eligibility, known as “life-sustaining therapy,” is that the person needs therapy to support a vital function at least three times per week for an average of at least 14 hours per week. That time includes time spent determining the necessary dosage of medications. Currently, about 4% of all approved DTC claims are filed under this ground of time spent on life-sustaining therapy.

A Parliamentarian asked the PBO to estimate the cost implications of Bill C-399. Bill C-399:

  1. lowers the number of required weekly hours of life-sustaining therapy from 14 hours to 10 hours,
  2. clarifies that time taken to determine the appropriate dosage of medical food and formula should be counted as part of therapy, and
  3. allows claimants to include time spent on activities directly related to determining dosages of medication which is also related to a dietary or exercise regime.

Using data from a time-use survey conducted by Statistics Canada, the PBO estimates that 35,000 people will become eligible resulting in 22,000 additional claims for each tax year.

Bill C-399 is expected to:

  1. Cost the federal government $39 million annually consisting of:
    • $25 million annually in reduced income tax revenue
    • $0.4 million annually in working income tax benefit supplements, and
    • $13 million annually in Registered Disability Savings Plan related tax and program expenditures which will rise with increasing adoption;
  2. Cost the provinces $9 million annually in reduced income tax revenue; and,
  3. Provide an average of $2,140 in benefits per person for each tax year.

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