MPs score Finance and CCRA for treatment of disability tax credits. (Income Security).

OTTAWA -- A parliamentary sub committee had harsh words for the Canadian Customs and Revenue Agency (and its predecessor, Revenue Canada) along with the Department of Finance about the way in which they have chosen to administer the Disability Tax Credit. The Human Resources and Development's Sub Committee on the Status of Persons with Disabilities released it fifth report in ten years, voicing the same complaints as before. The Sub Committee, which is chaired by MP Jude Longfield.

Stressing that each time the CCRA and Finance have tried to restrict eligibility for DTC, "parliamentarians responded to the outcry of Canadians. Each time, the House of Commons committees and a ministerial task force tabled unanimous reports that contained essentially the same recommendations."

In all cases, the report notes that those recommendations emphasized the need for the tax system to deal in a humane and compassionate manner with Canadians with disabilities by "improving the policies and the administration of the income tax system generally--and the DTC in particular."

The latest report, Tax Fairness for Persons with Disabilities, also outlines the impasse between the CCRA and Finance. The response of the Department of Finance to previous report was the was to propose amendments to the Income Tax Act to restrict DTC eligibility for people who cannot feed or dress themselves. At the same time, the CCRA also proposed revisions to the DTC application form, which "would have restricted eligibility for the DTC even further."

Although the Department of Finance professes to respect the parliamentary process, the Sub Committee in its fifth report charges that "this respect does not seem to be very profound," given the Department's response and actions, including the lack of mention of the proposed amendments to the Income Tax Act and a failure to respond to two-thirds of the report's recommendations.

In the late fall of 2002, Parliament unanimously passed a resolution calling on the government tO act on the Sub Committees recommendations, particularly recommendations "calling for changes to the eligibility requirements of the Disability Tax Credit so that they will incorporate in a more humane and compassionate manner the real life circumstances of persons with disabilities and withdraw the proposed changes to the Disability Tax Credit released on August 30, 2002."

Although the CCRA has taken some steps, such as stopping all aspects of reviewing the eligibility of current DTC recipients until the Committee is comfortable with the redesigned application form, the Department of Finance position is "far less satisfactory and far less responsive to addressing our concerns about DTC policies."

In particular, the Sub Committee cited the Department's "administrative interpretation" of the DTC provisions in the Income Tax Act to decide levels of disability by generally considering "all or substantially all of the time" as being 90 per cent of the time to be at odds with what was initially conceived as eligibility.

Given these restrictions and the eligibility interpretation, the report states that it is no wonder that "thousands of Canadians who applied for the DTC in full faith as well as medical practitioners, who followed the government's instructions in filling out these applications, now believe that they had been hoodwinked."