dave@lsuc.uucp (David Sherman) (02/17/89)
The income tax credit for persons with a "severe and prolonged
mental or physical impairment" is a classic example of law which
is being interpreted by Revenue Canada in a way which may be
materially misleading to the public.
The credit is worth approximately $830, depending on the
province. Qualifying for disabled status also entitles the
taxpayer to various other claims, such as certain medical expenses
not otherwise allowed. So knowing whether one fits the Income
Tax Act's definition of disabled is important.
The Act provides (s.118.3(1)(a)) that the credit is available to
an individual with a "severe and prolonged mental or physical impairment
that has been certified as such in prescribed form by a medical doctor..."
Paragraph 118.4(1)(a) then provides that
"a person shall be considered to have a severe and
prolonged impairment only if by reason thereof he is
markedly restricted in his activities of daily living
and the impairment has lasted or can reasonably be
expected to last for a continuous period of at least
12 months".
The term "markedly restricted in his activities of daily living"
is the key. This phrase has not yet been interpreted by the courts,
as the definition has only been in place since 1986. Revenue Canada
provides, on Form T2201 which must be filed to claim the credit, a
set of "Eligibility Guidelines" which explain what Revenue considers
to be the correct definition of the phrase.
The problem is that Form T2201 gives not the slightest indication
that the criteria is sets out are, for the most part, administrative
views only. The form says, "Please read the following to ensure
that you fully understand the eligibility criteria that must be met
in order to qualify...". It then carries on with the guidelines.
If you or anyone you know is in a position to claim the disability
credit, but are not sure because you may not fit within the guidelines
in Form T2201, make sure you know which requirements are in the
Income Tax Act and which are Revenue Canada's administrative creation.
The latter set are not law and do not necessarily apply. The tricky
part will be explaining this legal point to the physician who must
certify the disabled status on Form T2201. But it's worth doing.
The *only* legal definition is the one in the Income Tax Act, as
quoted above.
I cannot fault Revenue Canada for coming up with guidelines for
eligibility. It has a mandate to interpret the Income Tax Act
for the public, after all. But it should not be setting out its
interpretation as though it were law.
David Sherman
(yeah, tax lawyers have a different perspective than accountants:-)
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