Disability tax credit benefits Canadians with diabetes

Some Canadians who use insulin to manage their diabetes may be eligible for a federal tax credit worth up to $1,055 when they file their 2005 tax returns next year, the Canadian Diabetes Association announced recently.

Since May 2004, Canadians using an insulin pump have been eligible for a tax credit. Announced as part of the recent federal budget, the criteria for the Disability Tax Credit will be expanded for 2005 to include Canadians with diabetes who inject their insulin, in addition to those who use an insulin pump.

The Association expects these amendments to allow those Canadians living with diabetes, particularly children, who spend at least 14-hours per week testing their blood glucose levels and taking multiple daily insulin injections or programming an insulin pump to be eligible for the disability tax credit. Children are most likely to qualify since the time spent by their parents administering the child’s insulin and testing blood glucose levels will be counted towards the 14-hour requirement.

“People with diabetes can face annual medical costs ranging up to $5,000 a year to manage their disease, so this federal assistance to ease some of the financial burden of diabetes is a most welcome first step,” said Karen Philp, Director, Public Policy and Government Relations, Canadian Diabetes Association.

In May 2004 the Canada Revenue Agency (CRA) confirmed to the Association that under current legislation, Canadians whose type 1 diabetes cannot be controlled with multiple daily injections of insulin, and for whom insulin pumps are a medical necessity, were eligible for the disability tax credit. However, as the CRA only considered the time actually spent administering the insulin to be included in the 14-hour requirement for ‘life-sustaining therapy,’ individuals who used a syringe to deliver their insulin (and not a pump) did not generally qualify.

The Canadian Diabetes Association argued strongly that it is the insulin that is the life-sustaining therapy, and encouraged the inclusion of medically-necessary activities such as blood glucose testing and injection preparation as part of the 14-hour requirement.

“People who are insulin-dependent are just that – they require insulin to live,” said Philp. “For Canadians with diabetes, this disease requires monitoring and adjustments of insulin requirements on a 24-hour basis, whether they use an insulin pump or a syringe. We welcome this extension of eligibility criteria to include insulin injection by syringe as well as by pump.”

The Canadian Diabetes Association has offered to work with the CRA to develop guidelines to assist individuals with diabetes and their doctors to determine whether they would be eligible for the disability tax credit under the proposed changes. The Canadian Diabetes Association also will continue to encourage greater federal and provincial government assistance to help ease the financial burden of Canadians living with type 1 or type 2 diabetes.

Tax relief for Canadians with diabetes

Canadians with diabetes who are eligible for the 2005 disability tax credit could see a federal tax credit of up to $1,055, as well as tax relief at the provincial level. 4 Parents of children who are eligible for the disability tax credit may also claim the disability tax credit supplement for children, which provides additional tax relief of up to $616. They may also receive assistance from the Child Disability Benefit, which is paid as a supplement of the Canada Child Tax Benefit to low- and modest-income families caring for a child with a disability. The recent federal budget increased the maximum Child Disability Benefit to $2,000 beginning in July 2005.

Canadians with type 1 or type 2 diabetes may also be eligible for tax relief for their above-average medical costs by claiming the federal government’s medical expense tax credit. This credit recognizes the cost of insulin, needles or syringes, insulin pumps, and blood glucose testing devices.

People with type 1 diabetes produce little or no insulin and require daily insulin injections to stay alive. It is estimated that up to 40% of people with type 2 diabetes (usually managed with lifestyle modifications and medication) may eventually need to move to daily insulin injections.

The Canadian Diabetes Association works to prevent diabetes and improve the quality of life for those affected, through research, education, service and advocacy. With a presence in more than 150 communities, the Canadian Diabetes Association’s strong network of assistance includes volunteers, employees, healthcare professionals and partners. The Canadian Diabetes Association – Know who to turn to.