NOT GETTING THE RDSP GRANTS AND BONDS? CHECK YOUR NAME WITH THE SIN REGISTRY
April 2022
Audrey Veltri, IG Wealth Management
Providing for a Lifetime, Winter 2022
SPLITTING DISABILITY CREDITS
January 2022
Audrey Veltri, IG Wealth Management
Crystal Mathieson, Pinnacle Accounting and Finance
When a relationship ends, there are usually many things that need to be divided- and one of those things can be tax benefits and credits. In this article, we will discuss the options that couples have when they separate and are supporting a dependent with a disability.
The first tax credit we will look at is the Disability Tax Credit, a federal non-refundable tax credit which was designed to recognize that Canadians living with a disability can face higher costs of living. The credit itself is formally attached to the SIN number of the individual with the disability but can then be transferred to another person, providing that person is providing regular and consistent support to the disabled individual.
In most cases where there are two parents, the parent with the higher taxable income would claim the credit, as it would provide the greatest reduction in tax payable. When a couple separates, it would still make the most sense, from solely a tax perspective, for the higher income earner to continue to claim the credit. However, this is not always possible, nor agreeable.
Here are the options for allocating the Disability Tax Credit, following a change in marital status.
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One parent can continue to claim the full credit amount
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Parents can elect to split the credit if caregiving responsibilities are shared
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Parents can elect to claim the credit in alternating years
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If a parent is required by a court order or written agreement to pay child support for the child with the disability, that parent is not permitted to claim the Disability Tax Credit. Therefore, the parent receiving the child support payments must be the one to claim the credit.
The Child Disability Benefit payment is a tax-free monthly supplement which qualifying families receive in addition to the regular Canada Child Benefit payment. When looking at the Child Disability Benefit, the rules are quite different.
This monthly supplement can only be received and claimed by one person. You are not able to split or share this benefit. In most cases, it will be paid to the person who is primarily responsible for the child, or the person with whom the child resides with the most.
It is important for couples to understand that the CRA will not engage in dispute resolution surrounding tax benefits or credits. If the separating couple is not able to come to an agreeable decision, the Canada Revenue Agency reserves the right to disallow anyone from making a claim until a resolution is provided. The CRA will request specific documentation to confirm the custody and living arrangements agreed upon for the child, as well as any child support arrangements in effect.
Footnotes:
*A separation occurs under the eyes of Canada Revenue Agency when the couple is living apart for a period of more than 90 consecutive days.
**If you were separated for only part of the year, special rules will apply, and you should contact an accountant for personalized advice.
Resources:
https://www.canada.ca/en/revenue-agency/services/tax/individuals/segments/tax-credits-deductions-persons-disabilities/disability-tax-credit.html#clm
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31800-disability-amount-transferred-a-dependant.html
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/disability-deductions-credits.html
https://www.canada.ca/en/revenue-agency/services/child-family-benefits/supporting-documents.html
If you or someone you care about has questions about this article or could benefit from disability supports and planning for the future, I am here to help.
We provide financial guidance to families supporting dependents with a disability and family stewards to ensure effective access to all financial programs and government supports. We implement strategies to protect these supports and guide families through periods of transition and all life stages. We create solutions that transcend generations, so families can enjoy today, embrace tomorrow and secure a comfortable, safe and healthy future for the whole family.
Audrey Veltri|403.619.0410|audrey.veltri@ig.ca
Partner at Pinnacle Accounting and Finance, Crystal strives to use her skill and knowledge to offer solutions and bring peace of mind to her clients. Having gained 17 years of accounting experience through work in public practice, industry and as a CFO, Crystal is able to relate her own practical experience to her client’s needs. She enjoys analyzing each client’s unique situation and putting together an optimal tax plan to help them reach their goals. Born and raised in Calgary, Crystal enjoys volunteering in the community and serves on the boards of local nonprofit organizations.
Crystal Mathieson|403.453.0532 x304|crystal@pinnacleaf.ca
Providing for a Lifetime – Fall 2021
Audrey Veltri, IG Wealth Management
OCTOBER 2021
Canadians living with a disability are significantly more vulnerable to fraud and financial abuse. Veritably, a study published by the Government of Canada reveals that people with disabilities are 50% more likely to be the victim of some form of abuse in their life.
One way to protect those vulnerable to financial exploitation is the valuable practice of having a designated Trusted Contact Person on file with your financial advisor or financial institution. What is a Trusted Contact Person (TCP)? A TCP is a relative, close friend, or caregiver you trust with your personal information. This is not the same as a legally appointed trustee or power of attorney, who has authority to make decisions on your behalf. In fact, a TCP has no authority to act or make decisions. A Trusted Contact Person is an individual that could be contacted should something seem off with you, your account, or should your trustee or power of attorney not be acting appropriately or in your best interests.
An advisor is not authorized to share detailed information about your financial accounts, assets, or holdings unless specific permission for this has been awarded. Rather the advisor is limited to the bounds of client consent and may only disclose the details that the trusted contact person requires to understand the nature of the concern and to obtain help for the client. When naming a TCP with your advisor, you should ensure there is adequate procedure and a formal process in place. New recommendations, as set by the Canadian Securities Administrators (CSA), encourage advisors to name a TCP on all client files, naming someone who can be contacted should something appear off. Once established, remember to check in regularly to ensure your trusted contact person information remains up to date, including contact details. Financial advisors are often well-positioned to see changes in financial behaviour that may indicate a problem. As an example, while supporting a client with a cognitive impairment the advisor notices some unexplained transactions and a higher frequency of requests for funds by the client’s trustee. Fortunately, they had a process for naming a trusted contact person, so the advisor was able to reach out and inquire about the recent account activity. The trusted contact person was able to connect with the client, discuss the situation, and together the TCP and advisor were able to put an end to the exploitation.
Naming a TCP is a valuable method of supporting both the people you love and yourself from suffering future financial harm or abuse. I strongly encourage you to apply this practice across your accounts and the accounts of the people you love to ensure a safe and healthy tomorrow.
If you or someone you care about has questions about this article or could benefit from disability supports and planning for the future, I am here to help.
We provide financial guidance to families supporting dependents with a disability and family stewards to ensure effective access to all financial programs and government supports. We implement strategies to protect these supports and guide families through periods of transition and all life stages. We create solutions that transcend generations, so families can enjoy today, embrace tomorrow and secure a comfortable, safe and healthy future for the whole family.
Audrey Veltri|403.619.0410|audrey.veltri@ig.ca
Providing for a Lifetime – Summer 2021
RDSP ROLLOVERS
Audrey Veltri, IG Wealth Management
July 2021
Registered Disability Savings Plans (RDSP’s) certainly come with many rules, as discussed in the 2021 winter edition of Providing for a Lifetime. They are also accompanied by some beneficial planning opportunities in the form of rollovers. These tools were introduced with the goal of giving more flexibility and providing greater long-term financial security for supporting loved ones with a disability.
What is a Rollover? Simply put it is the opportunity to move funds from one account structure to another without incurring a current tax liability. Yes, you get to defer the taxes to a future time and in the case of an RDSP rollover, to another person.
Registered Education Savings Plan Rollovers
The first rollover provision involves the Registered Education Savings Plan (RESP). This rollover, which was introduced in 2012, permits accumulated income payments from the RESP to be rolled to the RDSP providing the beneficiary of both accounts is the same. This amount counts towards the $200,000 lifetime contribution amount, but the funds transferred do not count as a contribution for grant purposes- so they will not be matched. When the rollover occurs any education grants or bonds remaining in the RESP are returned to the government.
Some other noteworthy rules :
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the beneficiary must be DTC eligible at the time of the rollover, be 58 years or younger, be living, and be a resident of Canada.
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the beneficiary’s impairment prevents them from enrolling in post-secondary or the RESP must have been either:
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open for at least 10 years and the beneficiary is at least 21 years of age or
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the RESP has been open for 35 years.
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What’s the big deal? Well, if you didn’t make use of the rollover, and the beneficiary didn’t use the RESP- the RESP would close. Education grants and bonds would be repaid, and the balance of capital would be returned, and investment income would be paid out to the owner (you) and subject to tax at your marginal tax rate. Not effective.
Another beneficial feature of the rollover is that amounts rolled from a RESP count towards the determination of whether the RDSP is a Primarily Government Assisted Plan (*PGAP). From a planning perspective the rollover can serve as a source of future funds waiving this restriction to provide increased flexibility for upcoming Lifetime Disability Assistance Payments.
It can be advantageous to wait until you are certain that the beneficiary will not attend any form of post-secondary prior to making the rollover election. RESP’s come with some more lenient rules when they are opened for a beneficiary who is disabled. These concessions are designed to provide increased flexibility, recognizing that education may look slightly different for Canadians living with a disability. They include:
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that the plan can be left open for 40 years.
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part time studies
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definitions of qualifying programs
Registered Retirement Savings Plan Rollovers
The second permissible rollover is from a Registered Retirement Savings Plan (RRSP) and was introduced in 2010. These rollover rules also apply to Registered Retirement Income Funds, some lump sum payments from Registered Pension Plans and Pooled Registered Pension Plans.
Rollovers are only permitted from a deceased individual’s RRSP to their financially dependent child or grandchild. Similarly, to the RESP rollover, amounts rolled from an RRSP count towards the $200,000 lifetime contribution limit but are not considered for grants and thus are not eligible for matching from the government.
An individual does not need to live with the beneficiary to demonstrate financial dependence. However, determining financial dependence can be challenging. One important factor in this determination is to confirm if the beneficiary’s income is under the basic personal amount plus disability amount, which is $22,470 for 2021, this amount is indexed annually to inflation.
In the same way as within a RESP rollover, the amounts transferred from a RRSP are considered for the purpose of determining the *PGAP status of an RDSP. And as such provide another available source to contribute to waiving the limit of withdraws in the future.
In the same way as within a RESP rollover, the amounts transferred from a RRSP are considered for the purpose of determining the *PGAP status of an RDSP. And as such provide another available source to contribute to waiving the limit of withdraws in the future.
Amounts rolled to the RDSP move on a tax deferred basis, avoiding some of the tax the estate would normally pay. This serves to reduce the estate tax and increase the overall inheritance provided to both the beneficiary of the RDSP and to other potential estate beneficiaries.
Let’s look at an example (courtesy of **Mackenzie Investments):
This example clearly outlines the financial benefits of RRSP rollovers by increasing the amount given to Jane’s disabled son by $90,000! Additionally, these amounts are; available for use immediately, not subject to AHA or repayment obligation, have served to waive the *PGAP rule and best of all are in an account that are protected from provincial assistance benefit cutbacks.
Careful planning should always be provided for rollovers. It is strongly recommended to seek advice from a financial planner or tax specialist prior to making an election to ensure you’ve considered the options available and the implications to your family.
*PGAP, Primarily Government Assisted Plan.
A PGAP RDSP refers to an RDSP where the government has contributed more funds than private contributions. In the case of a PGAP there is an annual limit placed on Lifetime Disability Payments LDAP’s
**Mackenzie Investments. Can you roll over your registered plan to an RDSP?
https://www.mackenzieinvestments.com/content/dam/final/corporate/mackenzie/images/web/services/wp-tep-registered-plan-rollovers-en.pdf
If you or someone you care about has questions about this article or could benefit from disability supports and planning for the future, I am here to help.
We provide financial guidance to families supporting dependents with a disability and family stewards to ensure effective access to all financial programs and government supports. We implement strategies to protect these supports and guide families through periods of transition and all life stages. We create solutions that transcend generations, so families can enjoy today, embrace tomorrow and secure a comfortable, safe and healthy future for the whole family.
Audrey Veltri|403.619.0410|audrey.veltri@ig.ca
Providing for a Lifetime – Spring 2021
FEDERAL BUDGET PROPOSES IMPROVEMENTS TO DISABILITY TAX CREDIT
Audrey Veltri, IG Wealth Management
April 2021
The 2021 Federal Budget announcement on April 19, 2021 was delivered by Canada’s Deputy Prime Minister and Minister of Finance Chrystia Freeland. The proposal unveiled a historic $101.5 billion dollars in new spending focused on many issues including extending pandemic supports, a national childcare plan, increases to minimum wage, an investment in climate change and green initiatives, and some much-needed changes to the Disability Tax Credit, DTC.
I couldn’t be happier. For years I have been advocating for changes to the federal Disability Tax Credit Program, particularly to the eligibility terms surrounding mental functions necessary for everyday life. And finally, some promising movement.
The details of the proposal are as follows.
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An update to the list of mental functions which would qualify for eligibility.
Currently, under the category of metal functions necessary for everyday life, applicants must show a significant, prolonged and almost constant impairment in three areas; adaptive function, memory and problem solving/goal setting/judgment (taken together). These broad and uncertain categories have created challenges for many Canadians who are impacted by what can be referred to as neural diverse disabilities, or cognitive impairments. Diagnoses such as ASD, ADHD, FAS, and mental health conditions among others have historically faced challenges to fit their complex effects into these ambiguous boxes.
Applications can be rejected or delayed for not meeting eligibility mainly due to improper wording. This results in appeals or request for more information letters to be sent to the applicants’ medical practitioner, creating additional administration efforts, time and cost.
The new, more clinically relevant terms, more accurately describe and articulate the range of mental functions that are necessary for everyday life. The aim is to smooth out the application process, reducing delays, requests for more information and to improve overall access to those impacted by significant cognitive impairments.
The proposed terms include:
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attention
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concentration
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memory
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judgement
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perception of reality
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problem solving
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goal setting
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regulation of behaviour and emotions
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verbal and non-verbal comprehension
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adaptive functioning
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Recognition of more activities in determining the amount of time spent on life-sustaining therapy and a reduction in the minimum required frequency of therapy to qualify for the DTC.
This category of the DTC was designed to recognize that Canadians facing a life-threatening condition may require therapy which is essential to support vital function and that this therapy can result in significant impacts on their everyday living. This section of the form was another contestable area of the DTC application as the restrictive limits left many Canadians who were facing life threatening conditions or extreme medical fragility, without the support of the credit and its gateway programs.
The current rules require that the therapy be delivered at least 3 times per week and that the weekly average time taken was at least 14 hours. The issue is some activities which are essential to the therapy are excluded in determining time spent receiving treatment. This includes activities related to dietary, exercise, restrictions, regimes (even if those restrictions or regimes are a factor in determining the daily dosage of medication), travel time, medical appointments, shopping for medication and recuperation after therapy. These activities which can be essential to the prescribed therapy can take a significant amount of time and can greatly impact the ability to engage freely and equitably in activities of daily life.
To recognize that these aspects of therapy are essential and in fact do take time away from everyday normal life the budget proposes to:
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allow reasonable time spent determining dietary intake and/or physical exertion to be considered when determining the dosage of daily medication
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clarify that the exclusion of time for medical appointments does not apply to appointments to receive therapy or to determine the daily dosage of medication
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allow reasonable time spent on activities that are directly related to the determination of the amount of; medical food or medical formula, or to limit intake of a compound that can be safely consumed as part of the therapy
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the exclusion of time for recuperation after therapy does not apply to medically required recuperation
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where an individual is incapable of performing their therapy on their own due to the impacts of their disability, the time reasonably required by another person to assist the individual in performing and supervising the therapy would be allowed to be counted.
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the requirement that therapy be administered at least three times each week be reduced to two times each week.
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The annual estimated costs of these changes over the next five years are provided in the chart below and total $376 million in the form of non-refundable tax credits to Canadians living with a severe disability or condition or the families and caregivers that support them.
Many Canadians living with a disability are in income brackets that are essentially non-taxable and, as the credit is non-refundable in nature, it does not provide financial relief to these individuals. The DTC does however act as a gateway providing access to other tax-related credits, benefits and measures. Most notably the Registered Disability Savings Plan, the Child Disability Benefit and the disability supplement to the Canada Workers Benefit.
These proposed changes are a step towards increasing financial security for Canadians living with a disability. In 2019 the Federal Disability Advisory Committee released a report on removing barriers and improving access to the DTC and RDSP. It contained 42 separate recommendations, so it would appear there is still more work to be done.
*More detailed information can be found on the Government Of Canada Website. Annex 6 Tax Measures-Supplementary information. https://www.budget.gc.ca/2021/report-rapport/anx6-en.html#disability-tax-credit
If you or someone you care about has questions about this article or could benefit from disability supports and planning for the future, we are here to help.
We provide guidance to families supporting dependents with a disability. We ensure families have effective access to all available financial and government programs and implement strategies to ensure that we protect these supports through periods of transition and at all life stages. We create solutions so families can enjoy today, embrace tomorrow and secure a comfortable, safe and healthy future for the whole family.
Audrey Veltri|403.619.0410|audrey.veltri@ig.ca
Providing for a Lifetime – Winter 2021
RDSP REDEMPTION RULES
How do you take the money out?
January 2021
Audrey Veltri, IG Wealth Management
RDSP’s are arguably the best method of saving and fortifying long-term financial security for persons living with a disability in Canada. The account created in 2008 is just over a decade old and we are only just beginning to see the positive impacts within the community. Awareness is beginning to cultivate and information on how to access and effectively structure contributions, grants and bonds is beginning to spread, albeit there is still much work to be done.
Naturally there is often a focus on how to fund the plan, but I find little attention is paid on how it will pay-out, be received and support the beneficiary. Beneficiaries, who in many cases, might not have the capacity to understand nor manage these payments. Therefore, it is important that when we establish these accounts, we also explore the short, mid and long-term outcomes and understand how this account will provide future support- because it comes with some rules, many rules in fact.
The first of which is the penalty for early redemptions which CRA calls a repayment obligation. It is quite severe. If you redeem funds within the ‘Assistance Holdback Amount’ (AHA) period, you could be required to pay back $3 of grants/bonds for every single dollar redeemed. The AHA period refers to a 10-year period in which any grants or bonds have been paid into the account.
Here is an example:
Sara has an RDSP which was opened in 2008, so its been open for 13 years. In each year her parents fully funded the plan with annual contributions of $1,500.00 which were matched with $3,500.00 in annual grants. She was not eligible for the bond. The total amount of grant in the account is $45,500.00 ($3,500 X 13). The Assistance Holdback amount is the value of all grants paid in the last 10-year period or $35,000.00 ($3,500 X 10). If in this year Sara needed some funds for a medical need and her parents took $3,000.00 from the RDSP to fund this need- they would cause a repayment obligation of $9,000.00 ($3 for each $1 they redeemed or $3,000.00 X $3 = $9000.00) In total they would create a $12,000.00 redemption from the RDSP to pay for a $3,000.00 bill.
So, while technically you are permitted to take funds from an RDSP at any time, it is not advisable to redeem funds until 10 years after the last dollar of bond or grant has been contributed. Therefore, it is important to structure your contributions, grants and bonds in such a manner that they agree with both the timing requirements and the financial needs of the beneficiary.
The next rule is called the 28-year rule. Once the beneficiary reaches the age of 28 and any year up until they are 59, they have the right to request a DAP, Disability Assistance Payment from their RDSP; without the consent of the holder. Essentially, a DAP is a one-time payment from an RDSP. This is something to be conscious of when a beneficiary is aware that they are the direct beneficiary of an RDSP, that funds are available to them, and they have ability to request them. It is also important to note that DAP’s requested by the beneficiary can also result in repayment obligations should they occur within the AHA period. To protect the RDSP from exposure to this rule, parents and caregivers should consider the defense benefits of legal and formal trusteeship orders.
Here is an example:
Eric has a neurological disability but is high-functioning and somewhat able to manage his finances. He becomes aware that his parents have an RDSP account for him and at age 29 he decides he wants to redeem some money. Without his parent’s consent Eric makes a request for a DAP in the amount of $4,000.00 for a brand-new gaming computer complete with desk and gaming chair. This $4,000.00 redemption occurs during a time when the AHA period is still in effect and thus causes a repayment obligation of $12,000.00 ($4,000 X $3). As a result, his gaming system actually cost him $16,000.00!
There are however restrictions on the total allowable amount of a DAP. These restrictions exist for all DAP’s, those requested by the beneficiary and/or the holder. The first rule for a DAP is that it would be disallowed should the redemption result in the RDSP value falling below the assistance holdback amount. If this happened, then the RDSP would not have sufficient funds to satisfy the repayment obligation. There is also a dollar-limit rule for a DAP this ensures that the total of all DAP’s requested in any one given year are below the greater of; the DAP formula or 10% of the fair market value of the RDSP at the beginning of the year.
When a beneficiary turns 60 the RDSP must begin to pay a minimum amount each year. This prescribed payment is called an LDAP or Lifetime Disability Assistance Payment. LDAP’s are regulated by a formula that is applied to the fair market value of the account at the beginning of each year. LDAP’s can be paid out at regular intervals, monthly, quarterly or annually. Once LDAP’s begin to pay out, they must continue until the RDSP is terminated or the beneficiary passes away.
There is an additional rule that is applied to LDAP payments if the RDSP is what CRA refers to as a PGAP, Primarily Government Assisted Plan. A PGAP occurs in a year when the total value of all government grant and bond payments is more that the total value of private contributions. If this is the case the total annual LDAP payment must not exceed the greater of; the LDAP formula and 10% of the account. For example, if you had an PGAP RDSP with a fair market value of $200,000.00 on January 1, the maximum dollar amount you could take out in that year would be around $20,000.00.
Now I must also tell you that, as with almost all rules, there are exceptions. Exceptions for the redemption rules exist if the RDSP is classified as a specified RDSP. While this is an article all in itself; to summarize a specified RDSP is when the beneficiary of the RDSP is experiencing a shortened life expectancy. Should this be the case special rules for taking the money out apply, with many of the above restrictions loosening.
As you can see RDSP’s can be complex. From applying for grants, funding the plan, to redeeming they require attention and planning to ensure they will adequately and effectively meet the needs of the beneficiary. But even with all the rules and regulations they truly are the best method of saving for a secure future and when structured and managed properly, they are an incredible solution to ensure the well-being of Canadians living with a disability.
If you or someone you care about has questions about this article or could benefit from disability supports and planning for the future, we are here to help.
Audrey Veltri|403.619.0410|audrey.veltri@ig.ca
We provide guidance to families supporting dependents with a disability. We ensure families have effective access to all available financial and government programs and implement strategies to ensure that we protect these supports through periods of transition and at all life stages. We create solutions so families can enjoy today, embrace tomorrow and secure a comfortable, safe and healthy future for the whole family.
Buds in Bloom: Turning Points … An introduction
Life is about Turning Points; moments that present a decision which changes your life forever.
One of mine began with the sound of a phone ringing. You see, my wife and I had tried to have children but were unable to do so. So we decided to open our home and adopt. That was the sound that began a new chapter in our lives over 12 years ago.
Funny how a little thing can become a much greater one without fanfare, without much ado, and yet the smile of a baby can change you in an instant. Before you know it, you’re a parent, a Dad, and you realize that you have no idea what you’re in for, and someone forgot to mention that kids don’t come with a manual, the hours are non-negotiable, and vacation only happens in the wee hours in the bathroom before the kid wakes up.
Then you’re told your child may have a “disability”, or a significant “challenge”, or whatever wording they use at the moment to say that you’ve been upgraded to the deluxe adventure free of charge. Ho boy.
But really, that is what you’ve signed up for, knowingly or not, you are now a Parent, and being a Parent means you are now Indiana Jones and your child is going to show you the secret temple in the jungle. How you get there is more important than what is waiting for you at the end of the trail. So let me begin with our adventure with Eddie when he began his preschool life.
You see, Eddie didn’t talk. At the age of three you’d expect to be inundated with questions about the sky, food demands, and why Auntie June smells like catnip. For Eddie it was more of an “Uhn” sound and lots of pointing. What this meant to us is confusion, using a Rosetta Stone to decipher the language and a frustrated 3 year old.
Now before I continue, I’d like to say while I’m the one who can tell a story, my beloved wife is the true adventurer in the family. She’s the one who speaks to the experts, the educators, and manages the overall logistics of our trek. She’s all that and really smart to boot. So when I say “We”, it is more her, and then I’m ensuring that her plans come to fruition. Still a team, but she’s doing more of the overall work, so let’s be real about who does what.
We decided that our son needed help, so she did the calling and we had the meetings, and then Eddie enrolled in a preschool program designed to assist children with learning skills that are currently out of reach. To say the program was effective would be an understatement. Within 3 weeks our son was talking! Words began to flow out of his mouth, and we began to notice his visible frustration steadily being replaced with questions, wonder, and understanding.
It was an excellent beginning to our journey to say the least.
He spent two years in that program, learning the basics about social interaction, positive expression, all the while showing the sensitive nature that would later win the hearts of anyone who took the time to know and understand him.
But I digress for a moment, you see, like any good story you need to add more characters to challenge our protagonist and Eddie’s adventure was no different. You see, a few months into his first year of preschool our journey arrived at another new crossroads that once again began with the ringing of a phone. Once again life gave us a new turning point in the form of a baby brother for Eddie.
And with that our journey was altered forever.
Next chapter, I’ll tell you the story of how Ricky changed our house and the new challenges he brought to us all.
Until then, take care of yourselves and be well.
Buds in Bloom: Turning Points Blog
Life is about Turning Points; moments that present a decision which changes your life forever.
One of mine began with the sound of a phone ringing. You see, my wife and I had tried to have children but were unable to do so. So we decided to open our home and adopt. That was the sound that began a new chapter in our lives over 12 years ago.
Funny how a little thing can become a much greater one without fanfare, without much ado, and yet the smile of a baby can change you in an instant. Before you know it, you’re a parent, a Dad, and you realize that you have no idea what you’re in for, and someone forgot to mention that kids don’t come with a manual, the hours are non-negotiable, and vacation only happens in the wee hours in the bathroom before the kid wakes up.
Then you’re told your child may have a “disability”, or a significant “challenge”, or whatever wording they use at the moment to say that you’ve been upgraded to the deluxe adventure free of charge. Ho boy.
But really, that is what you’ve signed up for, knowingly or not, you are now a Parent, and being a Parent means you are now Indiana Jones and your child is going to show you the secret temple in the jungle. How you get there is more important than what is waiting for you at the end of the trail. So let me begin with our adventure with Eddie when he began his preschool life.
You see, Eddie didn’t talk. At the age of three you’d expect to be inundated with questions about the sky, food demands, and why Auntie June smells like catnip. For Eddie it was more of an “Uhn” sound and lots of pointing. What this meant to us is confusion, using a Rosetta Stone to decipher the language and a frustrated 3 year old.
Now before I continue, I’d like to say while I’m the one who can tell a story, my beloved wife is the true adventurer in the family. She’s the one who speaks to the experts, the educators, and manages the overall logistics of our trek. She’s all that and really smart to boot. So when I say “We”, it is more her, and then I ensuring her plans come to fruition. Still a team, but she’s doing more of the overall work, so let’s be real about who does what.
We decided that our son needed help, so she did the calling and we had the meetings and then Eddie enrolled in a preschool program designed to assist children with learning skills that are currently out of reach. To say the program was effective would be an understatement. Within 3 weeks our son was talking! Words began to flow out of his mouth and we began to notice his visible frustration steadily being replaced with questions, wonder, and understanding.
It was an excellent beginning to our journey to say the least.
He spent two years in that program, learning the basics about social interaction, positive expression, all the while showing the sensitive nature that would later win the hearts of anyone who took the time to know and understand him.
But I digress for a moment, you see, like any good story you need to add more characters to challenge our protagonist and Eddie’s adventure was no different. You see, a few months into his first year of preschool our journey arrive at another new crossroads that once again began with the ringing of a phone. Once again life gave us a new turning point in the form of a baby brother for Eddie.
And with that our journey was altered forever.
Next chapter, I’ll tell you the story of how Ricky change our house and the new challenges he brought to us all.
Until then, take care of yourselves and be well.
Buds in Bloom: Turning Points … Sleep
To say Ricky changed the dynamics of our household is like saying huskies only shed a little bit. A serious understatement to say the least.
Ricky to Eddie is the Sun to the Moon; complete opposites in every way possible.
Eddie was a calm child who loved to play with his Lego in the same place for hours on end watching the TV. He would have a nap in the early afternoon, get up content and have something to eat while smiling at the dogs.
Providing for a Lifetime – Fall 2020
DISABILITY & COVID SUPPORTS
October 2020
Audrey Veltri, IG Wealth Management
Prior to the pandemic Canadians with disabilities and their families experienced drastically higher than average rates of underemployment, unemployment, and poverty. COVID has widened this gap and created an even larger financial burden for persons with disabilities and their families. The onset of COVID-19 has led to increased hardship in the healthcare system, the workplace, the community, and even in the home, due to limited access to disability supports.
In June 2020 the Federal Government announced $550 million in financial support to people with disabilities and their families as they navigate new costs and challenges due to COVID-19. This announcement is the largest investment in people with disabilities by the Federal Government since the Registered Disability Savings Plan (RDSP) in 2008.
One of the announcements included a one one-time, non-taxable and non-reportable payment of $600 to Canadians who are eligible for the Disability Tax Credit (DTC), including families that receive the Child Disability Amount. The requirement to receive this payment is to hold a valid DTC certificate and that the certificate was applied for prior to September 25, 2020. Provided you meet the listed requirements the payment will automatically be provided, and those eligible will start receiving payments October 30, 2020.
This highlights the shortcomings of using the Disability Tax Credit as a mechanism to recognize, allocate, and distribute funds to Canadians with disabilities. To qualify for the DTC, applicants must navigate a complex screening process and have a medical professional certify their disability status, this can be particularly arduous for individuals with intellectual disabilities. Furthermore, despite CRA attempts to limit the cost, the DTC evaluation process can carry substantial costs, making it inaccessible to those who need it most. Statistics reveal only 40% of eligible Canadians are receiving the credit, leaving 60% of Canadians living with a disability without the benefit payment. And depriving them from further financial support and programs which are accessible through the DTC, like the Registered Disability Savings Plan (RDSP).
A senate appointed committee released a report in 2019 containing over 40 recommendations to amend the DTC process, making it more accessible to people with disabilities. As of now, few recommendations have been implemented.
As Canada plans for a COVID recovery, persons with disabilities, their families and the organizations that support them look for ways to work with various levels of government to address the systemic inequity that exists across the country. And we hope for the opportunity to collaborate on initiatives that will promote financial security for all.
The credit dates back to 1944, created to address the needs of those with severe vision loss in Canada, and was later expanded to include individuals with severe disabilities. During tax reform in the 1980s, it became a non-refundable credit, as it remains today. Non-refundable status indicates that it will not generate a refund for its claimant, but rather it reduces tax owing. If you are not in a taxable position, as many with severe disabilities are not, the application of the credit has seemingly no benefit to you. However, the credit can be transferred to a caregiver, such as a parent, and be claimed. The non-refundable status of the credit is one possible factor contributing to the lower utilization of the credit, particularly in adults with disabilities. Many families are unaware of its transferable status, and more importantly unaware of the many other benefits aside from tax relief that it provides.
The DTC also serves as an entry point for other government programs, the Child Disability Benefit and the Registered Disability Saving Plan. The CDB provides a monthly tax-free payment to eligible families supporting a disabled individual under age 18. For the period of July 2019 to June 2020, there is the potential to receive up to $2,832 ($236.00 per month) for each child who is eligible for the DTC. The RDSP offers up to $90,000 in government grants and bonds towards the long term financial security for persons with disabilities. An acute lack of awareness surrounds these benefits and a greater gap exists in recognizing and understanding their affiliation with the DTC.
The application process for the DTC, which is administered through the CRA, is complex and cumbersome. Eligibility criteria are unclear and fraught with subjectivity and there is an inherent lack of consistency in the assessment of eligibly. This has led to confusion for health care professionals, families, caregivers, and people with disabilities themselves when considering their potential qualification and applying for the DTC. The application process and eligibility criteria are main focus points for the Disability Advisory Committee which was recently reinstated in November of 2017. In the DAC report released earlier this year, the committee made 41 recommendations to improve the DTC program.
I’d like to acknowledge that I feel fortunate to live in a country that has a program like the DTC which recognizes the potential financial impacts of living with a disability. At the same time, I have experienced and frequently encounter many challenges in accessing this vital measure for Canadians with a disability. There are wide-ranging concerns and potential solutions. Clarifying eligibly criteria is a significant starting place for reducing barriers. Decoupling the DTC from other benefits, such as the RDSP and switching administration of the program from the CRA to ESDC Employment and Social Development Canada have also been proposed by some policy groups. I have included links to the various policy papers available on the DTC, including the link to the Disability Advisory Committee’s recent report and recommendations.
If you are not currently eligible for the DTC and are uncertain whether this program could benefit you or someone you care about I encourage you to explore your options and the role the credit could play in strengthening your current situation and creating a secure future.
Resources:
https://www.canada.ca/en/services/benefits/covid19-emergency-benefits/one-time-payment-persons-disabilities.html
https://www.canada.ca/en/department-finance/economic-response-plan.html
https://www.canada.ca/content/dam/cra-arc/corp-info/aboutcra/dac/dac-report-en.pdf
If you or someone you care about has questions about this article or could benefit from disability supports and planning for the future, I am here to help.
We provide guidance to families supporting dependents with a disability and family stewards to ensure effective access to all financial programs and government supports. We implement strategies to protect these supports and guide families through periods of transition and at all life stages. We create solutions that transcend generations, so families can enjoy today, embrace tomorrow and secure a comfortable, safe and healthy future for the whole family.