When I started in this business in 1966, the disability credit was almost
unheard of.
To qualify, one had to be confined or expected to be confined to bed or
wheelchair
for 12 months OR be legally blind for the entire calendar year.
In seminars, I would use the example of someone who drank wood alcohol at a
Xmas party and then fell down the stairs and broke his back.
If the broken back resulted in paralysis, he or she would get the wheelchair
exemption for the year of the incident but had to wait a year for the blind
exemption.
There was no such thing as a transferable exemption and anyone who could get
up to go to the bathroom did not qualify period.
Later on, the Green case started the concept of transferring a disability
exemption to
a parent and later on the concept of getting the exemption if you could not
walk 50
metres at a time came along.
Today, use of the exemption is very common. The new battles range along
the concept
of pain and misery which are all justifiable but sometimes hard to deal with.
In one case I was involved with, a doctor had given his patient a certificate
because she
could hardly make it into his office, because of pain when she walked.
He later saw her walking painfully and slowly on the sea wall in west
Vancouver.
She would force herself to walk two blocks a day to stop herself from
atrophying (sp?).
It might take her half an hour to walk her two blocks but she could do it.
Two blocks is more than 50 metres. The good doctor wrote to the CCRA and
revoked his certificate.
We also have to recognize that disabilities are hard to define. I have
one client
who is a quadruple amputee. He is cheerful, upbeat and making a go of
life.
He does not consider himself disabled and with his three different sets of
legs,
particularly the ones with the spring steel, he can outrun an able bodied man.
Another person with both legs amputated in a motorcycle accident is suicidal
and can't get started at anything. Rick Hansen does not consider himself
disabled,
just challenged. However, he qualifies for the disability deduction.
A bigger challenge for everyone is the difference between disability for the
Canada Pension Plan and disability for Income Tax purposes.
Rick Hansen is a perfect example. He qualifies for an income tax disability
deduction
but not for the Canada Pension Plan award. Why? Well, the Income
tax disability is
based upon physical and mental limitations. It revolves around movement
and mental
cognitive powers. Believe it or not, someone who can not look after
their financial
affairs can receive an income tax disability deduction.
The Canada Pension Plan disability revolves around ability to work.
Therefore, Stephen
Hawking and Rick Hansen do NOT qualify for Canada Pension Plan benefits
because
they work.
This came home to roost just last week for a client I had not seen for 10
years.
She has been on Canada Pension Plan disability and a wage replacement plan for
ten years and moved away from the big city to live better on her reduced
income.
She bought an old house and with the help of her husband and son, started a
bed
and breakfast, which never made a profit. In fact, from 1990 to the
present, she
would claim about $2,000 a year as a business loss. The CCRA turned down
her
deductions because there did not seem to be any reasonable chance of profit.
Her new accountant (who just did not recognize the consequences) went directly
to
the CCRA to plead her case. His presentation showed how much effort she
had put in
to the "BUSINESS", and how there would be a profit "just around the corner"..
The result was that his statements and paperwork caused the Canada Pension
Plan
people to revoke her CPP benefits of about $8,000 a year. That was just
the start.
Now the CPP people want over $90,000 back from 1989 to 2000.
Can I do anything for her? Likely a bit. The practical fact
is that she has been running the
business, playing mein host for about 5 years. Her husband and son
say that she
really did not do anything for the first 5 years and that they started the
business to
make her "feel better" mentally. And it worked, after five years of
being the titular
host, she became the real host. Her disability was a mental breakdown
and depression
which still exists but not to the same extent.
Of course, this also points out another problem with disablity claims.
If a person on disability tries to go back to work and for whatever reason,
the job disappears
they cannot usually go back on disabilty if the job disappears. By
"trying" they lose lifetime
benefits and this stops people from even trying.
An example of this would be my offering a person on BC welfare disability.
She had
worked for me in the past before the defined disabilty. The disability
had likely been
responsible for her leaving my employ in the first place several years ago.
She has not worked at a real job since although does volunteer here and there
on
a very occassional basis.
I was going to offer a two month job this tax season offered her a half time
position
for two months. After talking to two different social workers, I decided
that I would
be doing her a disservice to make the offer. Both social workers agreed
that if
she took the job, she stood a good chance of being disqualified for her BC
disability
pension if she lasted the two months. Of course, if she could not cope
after two
weeks, she would still qualify but who needs another failure in their life.
I won't tell you about the
comments that the social workers made about the Campbell
governments' poliices with regard to their jobs.
