Parents of dependent children with any Mental Health diagnosis are encouraged to apply for the Federal Disability Tax Credit Certificate. This certificate allows you to enjoy a tax savings at almost any income level (NOT just for lower income families)! Once approved, the tax credit is transferred from the child who qualifies to a parent or other supporting person. It is only useful to someone who pays taxes (in some cases a person with a disability has no taxable income).
This tax credit is available whenever a child of any age is markedly restricted in the activities of daily living on an on-going basis. These restrictions can be cognitive, developmental, physical or mental, or a combination of disabilities. For children with mental health issues, the section of the form dealing with “Mental functions necessary for everyday life” is the area of interest to you. Some examples of the effects of your child’s impairments could be, but are not limited to:
- Constant supervision required due to hyperactivity or behaviour
- Parent must stay home to provide care (i.e., loss of income)
- Extra time/supervision needed to complete tasks like homework
- Supervision/re-direction needed in social situations
- Requires daily medication
- Requires frequent trips to the doctor/pediatrician
- Prolonged or repeated lessons (i.e. swimming) to be promoted or to progress
- Private lessons / tutoring
In 2008, the credit returned approximately $1,600.00 each year to a taxpayer that made use of it. It could also be back-filed ten years on a rolling annual basis (your claim can be back-filed to the date of your child’s diagnosis). In the years prior to 2001, the tax credit return was $1,000.00 per year as was the previous allowance. This back-filing for the full period in 2008 would return approximately $15,000.00 to the taxpayer.
To apply for this credit, the Disability Tax Credit Certificate (form T2201) must be completed by an authorized healthcare professional. In the case of learning disabilities, the authorizing professional can be a registered psychologist. Complete details about this tax credit are contained in the guide, RC4064-Medical and Disability-Related Information, which also contains the form T2201. http://www.cra-arc.gc.ca/E/pub/tg/rc4064/README.html .
To check your eligibility, visit the Canada Revenue Agency website: http://www.cra-arc.gc.ca/bnfts/fq_cdb-eng.html#q4 or call toll free: 1-800-959-8281.
In addition to the standard medical expenses such as prescription drugs and a variety of assistive devices, in 1999, the Federal government recognized that individuals with learning disabilities may have a need for supplementary educational service. These expenses may also include tuition costs if a patient (for example, a dependent) suffering from a behavioural problem arising out of a mental or physical disability or suffering from a learning disability, including dyslexia, who attends a school, that specializes in the care and training of persons who have the same type of problem or disability is considered to qualify under P118.2(2) (e), and the expenses paid for the patient are qualifying medical expenses even though some part of the expense could be construed as being tuition fees. The school need not limit its enrolment to persons who require specialized care and training.
These amounts can be deducted from the caregiver’s income under medical expenses on their tax return.
The cost of therapy received by a person who qualifies for the disability amount, provided by someone who is not the spouse or common-law partner of the person who is claiming the expense and who is 18 years of age or older, when the amounts are paid. The therapy has to be prescribed and supervised by a medical doctor, a psychologist (for a mental impairment), or an occupational therapist (for a physical impairment) – Form T2201 required.
Other financial supports available to low-to-middle income families (use the Canada Revenue Agency’s calculator to determine if you qualify (http://www.cra-arc.gc.ca/benefits-calculator/ ) that your child may qualify for are as follows:
- Canada Child Tax Benefit (CCTB)
The Canada Child Tax Benefit is a tax-free monthly payment made to eligible families to help them with the cost of raising children under age 18. The CCTB may include the:
A. National Child Benefit Supplement (NCBS) - The NCBS is a joint initiative of the federal, provincial, and territorial governments. This initiative is designed to:
- help prevent and reduce the depth of child poverty;
- ensure that families will always be better off as a result of parents working; and
- reduce overlap and duplication of government programs and services.
The NCBS is included in the CCTB and paid monthly to low-income families with children under 18 years of age. It is the Government of Canada’s contribution to the National Child Benefit (NCB). As part of the NCB, certain provinces and territories also provide complementary benefits and services for children in low-income families, such as child benefits, earned income supplements, and supplementary health benefits, as well as child care, children-at-risk, and early childhood services.
B. Child Disability Benefit - The CDB, which is based on family net income, provides up to a maximum of $204.58 per month for each child eligible for the disability amount. This amount is calculated automatically for the current and the two previous benefit years for children who qualify and are under 18 years of age with an approved from T2201 (Disability Tax Credit certificate).
Ontario Child Benefit – the Government of Ontario has created the Ontario Child Benefit (OCB) to help Ontario families with low or modest incomes to provide for their children. It will be delivered monthly with the Canada Child Tax Benefit (CCTB). For detailed information, please visit: http://www.cra-arc.gc.ca/bnfts/dsblty-eng.html.
- Special Services at Home (SSAH) is for severe (usually developmental) disabilities
- Ontario Disability Support Program (at age 17 start process for 18th year)
- Refundable Medical Expense Supplement
- Universal Child Care Benefit – The UCCB is designed to help Canadian families, as they try to balance work and family life, by supporting their child care choices through direct financial support. The UCCB is for children under the age of 6 years and is paid in installments of $100 per month per child.
- Children’s Special Allowances is for children kept in government approved agency care
- Children’s Fitness Amount – You can claim to a maximum of $500 per child, the feespaid in 2007 that relate to the cost of registering you or your spouse or common-law partner’s child in a prescribed program of physical activity. The child must have been under 16 years of age at the beginning of the year.
You can claim this amount provided that another person has not already claimed the same fees and that the total claimed is not more than the maximum amount that would be allowed if only one of you were claiming the amount.
Children with disabilities - If the child qualifies for the disability amount and is under 18 years of age at the beginning of the year, an additional amount of $500 can be claimed provided that a minimum of $100 is paid on registration or membership fees for a prescribed program of physical activity.
Note: You may have paid an amount that would qualify to be claimed as child care expenses (line 214) and the children’s fitness amount. If this is the case, you must first claim this amount as child care expenses. Any unused part can be claimed for the children’s fitness amount as long as the requirements are met.
To qualify for this amount, a program must:
- be ongoing (either a minimum of eight weeks duration with a minimum of one session per week or, in the case of children’s camps, five consecutive days);
- be supervised;
- be suitable for children; and
- require significant physical activity (generally, most of the activities must include a significant amount of physical activity that contributes to cardiorespiratory endurance plus muscular strength, muscular endurance, flexibility and/or balance).
Reimbursement of an eligible expense – You can only claim the part of the amount for which you have not been or will not be reimbursed. However, you can claim all of the amount if the reimbursement is included in your income, such as a benefit shown on a T4 slip, and you did not deduct the reimbursement anywhere else on your return.
For more information on any of the information listed above, please visit the Canada Revenue Agency website at www.cra.gc.ca or call 1-800-959-2221.
Some tax consultants are well-versed in the specific supports or tax deductions available for your family. You may seek professional advice in this matter. We note that some parent support groups in the Region have facilitated speakers on the subject of tax savings. They may be a good resource for this information as well. (see Local Support Group listing in the Finding Support Section).
For a complete list see Canada Revenue Agency list of what persons with disabilities claim as a deduction or credit, http://www.cra-arc.gc.ca/tx/ndvdls/sgmnts/dsblts/ddctns/menu-eng.html .
|Useful resources/links for FINANCIAL SUPPORTS:
Canada Revenue Agency website: www.cra.qc.ca or 1-800-959-2221
J.E. Arbuckle - www.finplans.net/documents.shtml
Caring for a child with a disability, and determining the support they will require over time is a big responsibility. It is one that needs to be considered seriously along with a will and powers of attorney. One of the best ways to provide for children after you die is to make legal arrangements that maximize your estate when you are no longer there to look after them.
You have three options:
- 1. You can fully support your child over his lifetime or until you die
- 2. You can plan for the Ontario Disability Support Plan (ODSP) to take care of your child’s needs
- 3. You can leave a trust fund for your child’s future
A Henson Trust is a type of trust designed to benefit disabled persons. It allows you to support your child without affecting ODSP. It protects the inheritance of the special needs person, as well as that person’s right to collect government benefits and entitlements. At the same time it allows the child to have some funds for extra expenses such as services they may need and holidays.
The key provision is that the trustee has “absolute discretion” in determining whether to use the trust monies to provide assistance to the beneficiary, and how much. This means that the monies cannot be used to deny government benefits.
In addition, the trust may provide income tax reductions by being taxed at a lower rate than if the total willed monies were considered. In most cases, the monies are immune from claims by creditors of the beneficiary.
Your decision to create a trust should be based on the following:
- 1. Will you have assets/monies in your estate that you will leave to your child
- 2. If the total amount is between $5,000 and $10,000, your child will lose ODSP without a trust set up
Please note that consideration should also be taken towards setting up a Power of Attorney for Personal Care and a Power of Attorney for Property. Samples of each are included below but using a professional to make lasting documents is recommended.
Links or Useful Resources for HENSON TRUSTS:
The Special Needs Planning Group - www.specialneedsplanning.ca
Documentation on Power of Attorney, Mental Incapacity, etc.- www.attorneygeneral.jus.gov.on.ca
Community Legal Education Ontario - or phone 416-408-4420www.cleo.on.ca
Henson Trust Handbook 2008) in PDF format- www.reena.org/pdfs/hensontrust.pdf
J.E. Arbuckle - www.finplans.net
A registered disability savings plan (RDSP) is a savings plan that is intended to help parents and others save for the long-term financial security of a person who is eligible for the Disability Tax Credit. (see Ontario Disability Tax Credit Certificate at the beginning of this section).Contributions to an RDSP are not tax deductible and can be made until the end of the year in which the beneficiary turns 59 years of age to a lifetime maximum of $200,000. Contributions that are withdrawn are not to be included as income for the beneficiary when paid out of an RDSP. Contributions may qualify for payments from the Canada Disability Savings Grant (CDSG) program, up to a lifetime maximum of $70,000.00 per beneficiary. However, the Canada disability savings grant, Canada disability savings bond and investment income earned in the plan are included in the beneficiary’s income for tax purposes when paid out of the RDSP.
Who can become a beneficiary of an RDSP?
You will be able to designate an individual as beneficiary if the individual:
- is eligible for the disability amount;
- has a valid social insurance number (SIN);
- is a resident in Canada at the time the plan is entered into; and
is under the age of 60. (This age limit is not applicable when a beneficiary’s RDSP is opened as a result of a transfer from the beneficiary’s prior RDSP)
A beneficiary can only have one RDSP at any given time, although this RDSP may have several plan holders throughout its existence, and it can have more than one plan holder at any given time.
Who can contribute to the RDSP?
Anyone can contribute to an RDSP with the written permission of the plan holder.
Who can open an RDSP?
To open an RDSP, a person who qualifies to be a holder of the plan must contact a participating issuer that offers RDSPs. Generally, financial institutions are the issuers of RDSPs.
If the beneficiary has reached the age of majority and is legally able to enter into a contract, then a disability savings plan can be established for such a beneficiary by the beneficiaryand/or the legal parent who is, at the time the plan is established, a holder of a pre-existing RDSP of the beneficiary.
If the beneficiary is a minor, another person can open an RDSP for the minor and become a holder if that person is:
- a legal parent of the beneficiary;
- a guardian, tutor, or curator of the beneficiary, or an individual who is legally authorized to act for the beneficiary; or
- a public department, agency, or institution that is legally authorized to act for the beneficiary.
For the most current information about RDSPs, please visit the Canada Revenue Agency website: www.cra-arc.gc.ca
COPYRIGHT QUEEN’S PRINTER FOR ONTARIO
COPYRIGHT QUEEN’S PRINTER FOR ONTARIO
Useful Resources/links for Power of Attorney:
For your free 24 page kit from the Ontario Government -www.attorneygeneral.jus.gov.on.ca/english/family/pgt/poa.pdf.
Transitioning To Adult Services
Transitions are about change. Sometime between the ages of 14 to 18 it will become more difficult for you, the caregiver, to be involved in your loved one’s life. Different services have different cut-off ages to allow this to happen.
You need to start to consider knowledge transfer and service transfer for your child. You also should consider the need for a Substitute Decision Maker or Power of Attorney form if the need warrants. (See sample forms inserted ahead of this page).
While this process is not the same for all young people the aim of successful transition is to optimize their abilities and what is available in the community to support them.
A holistic approach needs to be used – your child has the same needs as anyone else – but the actual process needs to be tailored to your child’s mental status and should include your child as much as possible.
Case management is one of the possibilities. This would be someone who would take responsibility for the transition, the co-ordination of community services, housing, social activities, further education, etc. while still being sensitive to the needs of the caregiver in beginning to let go.
There are a few on-line resources regarding transition planning although they are not specifically aimed at Mental Health needs they can be adapted. A helpful document is the BC Ministry of Children and Family Development: Your Future Now. A Transition Planning and Resource Guide for Youth with Special Needs and Their Families. It is listed below.
|Links or Useful Resources for TRANSITIONING TO ADULT SERVICES:
Parent’s Guide to Transitions – Developmental Disability focused but valid.Read the Guide
Community Connections Booklet - www.accesswaterlooregion.ca
A Transition Planning & Resource Guide for Youth with Special Needs and Their Families” – www.mcf.gov.bc.ca/spec_needs/pdf/your_future_now.pdf
“Connections” - www.cdrcp.com/transition.html
Ministry of Education - www.edu.gov.on.ca/eng/general/elemsec/speced/transit/transition.pdf
Parents for Children’s Mental Health - www.pcmh.ca
A Parent’s Guide to Transition
Waterloo Region Homes for Mental Health is a private, non-profit organization which provides a range of housing and support services for individuals experiencing or recovering from serious mental health issues. It was established in 1980 with one home consisting of eight beds.
It has mushroomed to an organization that provides services to more than 1,000 people annually through a range of housing options, longer term (housing, support, case management, and the Assertive Community Treatment Team (ACTT)) and shorter term support services (case management and outreach).
To be eligible you must be at least 16 years of age and have a diagnosis of a mental health issue. More information will be made available on the website soon.
Useful resources/links for WRHMH:
Waterloo Region Homes for Mental Health, Inc. - www.waterlooregionalhomes.com or 519-742-3191