Boost Your Income
What is the Canada Disability Benefit and who can Apply?July 04, 2023
The federal government offers income supplements for Canadians to help them ensure their financial security. Some of these are the Guaranteed Income Supplement (GIS), Canada Child Benefit, and even Old Age Security (OAS). However, there isn’t much available in the way of income supplements for working-age Canadians with disabilities.
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In Canada, only 59% of those who have disabilities earn their income by working which is significantly lower than the 80% of employed Canadians without disabilities. Even those with disabilities that are employed make less money than those who aren’t. In the age group between 25-65, those with mild disabilities earn 12% less and 51% with more severe disabilities. This can make it hard to make ends meet as prices on essentials keep rising. While there are some disability benefits available, they aren’t geared towards working-age Canadians and can be difficult to get approved for. According to the federal government, they plan to change this. They have just introduced a new legislation called the Canadian Disability Benefit.
What’s the Canada Disability Benefit?
The Canada disability benefit, also known as the CDB, is a new federal benefit that the government is hoping will reduce poverty in Canada. A 2017 survey shows that the poverty rate in Canada is twice as likely for those with disabilities than those without. While the amount people will receive with the new Canada disability benefit is unknown, it is a good start to getting more money to those who have disabilities and need the extra income.
The benefit is intended to support lower income Canadians with disabilities making ends meet as well as covering unexpected costs. This can be anything from expensive medications, specialized equipment, and medical procedures. The idea is to release some of the financial burdens since over 1 million Canadians who live with disabilities live in poverty with an average median income of just $12,250 per year. The low-income threshold sits around $25,920 and this is way below.
In the last 3 years, $11.9 million has been invested in order to make changes in eligibility policies regarding the CDB. At this point, it is unknown when this benefit will be available.
Who can apply for the CDB?
The CDB is available to low-income Canadians between the ages of 18-64 who have been diagnosed with a disability.
What’s considered a disability in Canada?
Defining a disability is difficult especially since there are so many hidden disabilities out there. However, according to the UN Convention on the Rights of Persons with Disabilities, a disability is a physical, mental, intellectual, or sensory impairment that makes a person’s participation in society difficult and unequal to others.
Canada does not have its own definition of a disability so it goes by the definition above. A long term disability is a condition that meets the terms above but lasts at least 12 months and/or is expected to result in death. Short-term disability is a condition that lasts less than 12 months and is not terminal. These conditions can be mental/psychological, affect sight, hearing, mobility, flexibility, learning, memory, dexterity, development or involve chronic pain.
Differences between CDB and other disability benefits in Canada
While there are some benefits available within Canada, none of those seem to be geared towards working-age Canadians. Some of those are also only available if your disability is severe. There is nothing for those who have disabilities that allow them to work but not as much as Canadians without disabilities.
If you look at the benefits below, you notice that there isn’t much available for the working-age Canadian who is disabled other than the disability tax credit and that doesn’t make much of a difference if you make well below the income threshold since the less you make the less taxes you pay. It is also geared towards Canadians with severe disabilities, not those with more minor disabilities that still greatly affect their lives.
Canada Pension Plan Disability Benefit
This benefit is available to you if you meet certain criteria.
- You must be under 65 and have put enough money into CPP.
- Are diagnosed with a long-term disability that could result in death or has no indication of getting better anytime soon.
- Are diagnosed with a mental/physical disability that stops you from working or working enough to be sustainable.
There is also the CPP post-retirement disability benefit that you’re eligible for between the ages of 60-65 and have already gotten a CPP retirement pension for at least 15 months or get diagnosed with your disability after starting the retirement pension. At the age of 65, any CPP disability pension automatically becomes a CPP retirement pension.
Once you apply you will receive a letter that contains information on how to check the status of your application as well as a personal access code that lets you sign in online. However, once you’re approved you should start receiving funds within 4 months unless your condition is considered to be grave, then payments can start within 30 days.
Canada Pension Plan Children’s Benefit
This type of benefit is eligible to children of anyone receiving a CPP disability pension if they are under 18, or under 25 and attend a recognized university full-time.
This is also available to children on someone who was receiving the CPP disability benefit but is deceased. It is known as a surviving child’s benefit.
Federal Excise Gasoline Tax Refund Program
In order to receive this tax refund, you must have a permanent mobility impairment that makes it so you’re unable to use public transportation in a safe manner. As long as a doctor (certified medical practitioner) certifies this claim then you can receive a portion of your money back that you pay in taxes on gasoline.
Education Funding for People with Disabilities
For university students with a permanent disability, depending on the university you study at, there are grants available to help you with your studies. As long as you can show that you:
- Need the money
- Are in an approved program
- If your disability negatively affects your ability to participate in school and work and is long term
- Can submit proof like a medical certificate or documents proving your disability
With these grants, you can get up to $4,000 per year. This is available every year until you finish school.
There are also other grants that can help you pay for textbooks and any student accommodations. In the case that your disability prevents you from finishing school and joining the workforce, you can apply to have any student loans forgiven.
Disability Tax Credit/Deductions
Another benefit available is the disability tax credit. This allows disabled individuals to apply for a non-refundable tax credit. This is meant to help with expenses by reducing the amount of income tax that they have to pay and to help with financial security.
In order to apply you need your doctor to fill out a form that you send in to wait for the approval. Once you have been approved you don’t need to reapply. It will continue year by year, and in some cases, you could receive back pay for prior years depending on when your disability started.
Child Disability Benefit
This is a payment you could be eligible for if you care for a child under 18 that’s mentally or physically impaired and the disability is permanent. There are only two things required to receive the disability tax benefit:
- Currently eligible to get the Canada Child Benefit.
- Your child is eligible for the disability tax credit.
If you have both of those requirements, then you will automatically receive this benefit.
Registered Disability Saving Plan
The benefit is also contingent on the fact that you’re already approved for the disability tax credit. It is also known as an RDSP and is designed to help you save for the future. Government grants and bonds can also be available to help you save.
Disability Benefits for Veterans
If you have a disability that’s related to your service in the RCMP or Canadian Armed Forces, then you could qualify for this. It is a tax-free benefit and could result in pain and suffering compensation or a disability pension.
What happens once you’re approved for the CDB?
Because the CDB is not active yet there is no definite procedure on what happens once you’re approved for the benefit. However, it is meant to be just like any other benefit the federal government offers, so you should receive a set amount monthly into your bank account. More information should be available soon since it was only announced by the Minister of Employment. Workforce Development and Disability Inclusion that the benefit was reintroduced to legislation on June 2, 2022.