Updated for 2024. One common misconception about the Disability Tax Credit (DTC) is that it holds no value for recipients of the Ontario Disability Support Program (ODSP) or other provincial benefits such as Assured Income for the Severely Handicapped (AISH).
While the non-refundable tax credit portion of the Disability Tax Credit is often the focus, otherwise known as a disability tax credit refund, ODSP recipients typically don’t have any taxes payable, so they can’t directly benefit from this part of the credit. However, this doesn’t mean that individuals on ODSP cannot leverage the other benefits offered by the Disability Tax Credit.
Even if the Disability Tax Credit refund cannot be utilized while on ODSP, it can be transferred to a relative who has provided assistance. Eligible relatives include common-law spouses, siblings, aunts, uncles, sons, daughters, parents, grandparents, or grandchildren.
The assistance must fall under what the Canada Revenue Agency (CRA) defines as “basic necessities of everyday life,” which includes financial assistance towards food, shelter, or clothing expenses. It’s important to note that support needs to be provided in at least one of these categories, not all three.
The support should be in the form of financial assistance for one of the mentioned necessities (food, shelter, clothing) during the years in which you want to transfer your disability tax credits. While the CRA doesn’t typically ask for receipts, they may request additional information regarding the amount of support provided and the specific month and year. It is advisable to provide as many details as possible when providing the CRA with examples of support.
By obtaining approval for the disability tax credit and transferring your credits to a relative, you can potentially provide significant savings to your family member, potentially reaching up to $27,000, if you can go back and retroactively claim the disability tax credit ten years (the maximum length of time you can backfile/retroactively claim the credit), and depending on the province/territory you reside in, as each province has a different provincial supplement.
No family to transfer your disability tax credits to?
If you don’t have a relative to transfer your disability tax credits to, it is still important to get approved for the disability tax credit as an ODSP recipient. This approval makes you eligible to benefit from the Registered Disability Savings Plan (RDSP) program.
The RDSP allows ODSP recipients approved for the Disability Tax Credit to take advantage of the Disability Savings Bond. This bond is a $1,000 amount granted annually to Canadians with disabilities who establish an RDSP and have a low to modest income, which includes ODSP recipients. The $1,000 bond continues to be provided every year until either the lifetime maximum of $20,000 (20 years) or the age of 50 is reached.
Additionally, funds provided through the Registered Disability Savings Plan (RDSP), Disability Savings Bonds, and Disability Savings Grants are exempt from the $40,000 asset limit imposed by ODSP and other provincial benefits, such as AISH.
It’s important to note that the eligibility criteria for the Disability Tax Credit and ODSP are completely distinct. ODSP eligibility primarily focuses on an individual’s work capacity, whereas the Disability Tax Credit focuses on a person’s ability to perform the basic activities of daily living (mental functions, walking, getting dressed, bowel/bladder elimination, etc.), and does not include work.
Read more about the Benefits of Getting Approved for the Disability Tax Credit.
I just been approved for Disability tax credit and I am on ODSP, will my DTC affect receiving ODSP?
No, it will not. You will want to ensure you have a high enough taxable income in each year you qualify for the DTC. If you did not, you will want to explore your options for transferring your credits to a family member.
Can you go back ten years with the RDSP?
Yes, you can retroactively claim the disability bond and disability grants for the RDSP, ten calendar years.
Looking to see if I can have my son claim this as he lives with me full time and takes care and helps support me
Yes, assuming you meet the eligibility requirements for the Disability Tax Credit (DTC), you can transfer your credits to your son since you reside with him. To find out if you qualify, you can request a free eligibility assessment here, https://www.disabilitytaxservice.ca/disability-tax-credit-assessment/
I have just been approved for the DTC and I am an ODSP recipient for the last 10 years. My 2 children are now 21 and 18 but I am confused as to whether I can hope to see a refund due to having dependants for a number of those years that could be calculated retroactively. During that time I didn’t have any taxable income and all income tax years were filed on time with no refund(due to being on ODSP)
Hi Jeff,
Thank you for your question. To give you a general answer, it’s unlikely that you will receive a disability tax credit refund. The DTC is a non-refundable tax credit, the DTC refund comes from reducing income taxes paid in previous years. You may not be able to make use of the DTC refund yourself, but you can transfer your credits to a family member.
You may be able to transfer your disability tax credits to another family member if the following apply.
1. The family member must be your spouse/common-law partner, parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece, or nephew.
2. They must have either resided with you OR they must have provided you with financial assistance towards either food, shelter, or clothing expenses in each of the years you want to transfer your disability tax credits to them. If they did not reside with you, you will need to provide the CRA with examples of the support provided, the more examples, the better. Examples can include things like $100 a month towards rent, $100 towards groceries several times throughout the year, $200 towards required seasonal clothing like a winter coat, etc.
3. The family member will also be required to have a taxable income and to have paid sufficient income tax in each of the years you want to transfer your credits.
I hope one of the options are applicable to you so someone in your family can make use of your credits. If you would like to discuss this further or have any questions, don’t hesitate to reach out at info@disabilitytaxservice.ca.
I’m on it so for many years if l qualify for the DTC and transfer it to my son how will that affect his income taxes financially. He is 30 and works full-time.
Hi Georgia,
By transferring your disability tax credits to your son, it will reduce the amount of income tax your son has to pay for each year when he claims his income tax. If you are transferring credits retroactively (for 2022 and previous years), your son will receive an income tax refund, in the form of a disability tax credit refund. If you have any further questions, don’t hesitate to ask.
I’m 56 and have been on odsp for approximately 8 years. My sister has been helping me with clothing and food. How does this work? Please explain to me how you qualify for this? Seems to be a bit complicated to me
Hi Christina,
You may be able to transfer your disability tax credits to your sister. The family (in your case your sister) but can be a spouse, common-law partner, parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece, or nephew. Also, they must have provided you with financial assistance or support towards food, shelter, or clothing expenses in each of the years you want to transfer your disability tax credits to them. You will need to provide the CRA with examples of the support provided for each year. The more you can provide, the better. Feel free to contact us for further information.
“It is worth getting approved.”
I’m a family doctor and this really annoys me. You make this sound like an administrative loophole that people just need to prioritize getting done.
Almost NO ONE qualifies for this tax credit. Being on disability – ODSP or CPP – in no way automatically (or even probably) qualifies someone for this. Not unless it takes them 4x longer to do a lot of things – 90% of the time. I have dozens of patients on ODSP – and ONE who qualifies for this. Someone who has spent their life in a wheelchair.
I’m sorry to be angry about this. It’s sites like this – and accountants generally – that are the problem, advising people to, “go to your doctor and get this form filled out.”
By the time people see me? Thanks to you, they’re overjoyed! believing all that stands between them and $40K is my willingness to complete some simple form.
Sites like yours create more problems than they solve. I’d ask you to consider this.
Hi Dr. Rae,
I appreciate your feedback and the opportunity to clarify some of the information. I try to ensure that my clients are eligible prior to reaching out to their doctor.
You are correct that the eligibility criteria for programs like ODSP or CPP-Disability are different from the criteria for the Disability Tax Credit. ODSP primarily focuses on a person’s ability to work, while the Disability Tax Credit assesses a person’s ability to perform the basic activities of daily living, excluding work.
To clarify, the requirement for the Disability Tax Credit is that a person must take three times longer to perform the basic activities of daily living compared to someone without an impairment, not four times longer as you mentioned. Additionally, if an individual has difficulty with more than one basic activity, the requirement can be combined, resulting in a two-times longer duration.
I believe you do the best you can for your patients. I’m working to improve the lives of people also.
If you have any questions or concerns, I’d be happy to discuss this further with you. I do think it’s important to promote correct information.
Kind regards,
I am glad you are not my doctor, it’s hard being on disability and even harder trying to get a doctor to understand our struggles.
I couldn’t agree more. I am an ODSP recipient and wanted to apply for the DTC years ago and was completely shut down by my GP, tell8ng me the exact same thing as Dr. Rae above is saying. What I discovered was that I knew more about the process and what my limitations added up to in regard to 5he DTC than my doctor did. She told me she filled them out “all the time” and I wouldn’t qualify. After taking g her advice for 5 years I decided I didn’t believe her and almost had to force her to assist me and fill out the forms. I JUST received word from CRA that I qualified and am approved. Now that I’m over 50 I’ve lost out on the RDSP because of .my doctors ignorance on the process.
I’m happy you were able to advocate for yourself and get approved. It’s unfortunate but a sad reality that in many cases you have to be your own advocate or get help from someone who can advocate for you. Medical practitioners do have a lot on their plate, the breadth of knowledge and skill set required to perform the job is high and I have no doubt, very difficult. With all that said, I don’t think having a deep understanding of the Disability Tax Credit Application is a high priority for many medical practitioners. Many medical practitioners read the form and the wording that the CRA uses, which can make the eligibility criteria seem more restrictive than it actually is. A big part of what Disability Tax Service does is help explain how and why our clients meet the eligibility criteria when communicating with our clients medical practitioners.
Can you explain how is the dtc effected because you are on odsp. i am confused by the information given as it seems t6o be referring to a few different situations. so could you explain more clearly. i have been on disability since 2004, and was told i could not be eligible because i was oon odsp, can you clarify for me.
Hi Donna,
The disability tax credit is a non-refundable tax credit. This means that it’s used to reduce the amount of federal and provincial income taxes paid when you file your taxes. ODSP is not a taxable income, so you do not pay income taxes on ODSP income received.
This means that in order to make use of the disability tax credit available to you (once approved), you must transfer your disability tax credits to a family member. It can either be a spouse/common-law partner, parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece, or nephew.
Additionally, that family member must have provided you with financial assistance towards either food, shelter, or clothing expenses in each of the years you want to transfer your disability tax credits to them. You will need to provide the CRA with examples of the support provided, the more examples, the better.
I hope that helps clarify everything. Feel free to contact us for more information.
I applied for DTC and CRA approved it for 5 years. Will this automatically help me to be eligible for ODSP? If so, can you elaborate?
Hi Kiran,
The Disability Tax Credit (DTC) and ODSP have very different eligibility criteria. The DTC focuses on a person’s ability to perform the basic activities of daily living (BADL) and work is not directly considered by the CRA as one of those activities. ODSP focuses primarily on person’s ability to work. The DTC approval may be used as supplemental evidence with making your ODSP claim but it will not automatically qualify you for ODSP benefits.
I recently applied and was granted the disability tax credit . I have been on odsp all my adult life and am now 54 . I was just married in 2021 . On my cra it says I’m eligible from 1985- 2007 then it also says I’m eligible from 2008 – indefinitely… Never being employed would I be entitled to money or can it only be used if my husband owes Taxes ? Which he never does .. so I’m kind of confused why they are mentioning Dates from 1985 ? Is there an easier way to understand this ?
Hi Patti,
The CRA will state which years you’re eligible for the Disability Tax Credit (DTC) regardless of if you’re able to apply the credits on your own income tax or not. You can transfer your credits to your husband but I would have to have further information to determine if your husband would be able to make use of your credits. Keep in mind, you may be able to transfer your credits to another family member, such as a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece, or nephew. You must have either resided with them or they must have provided you with financial assistance towards either food, shelter, or clothing expenses in each of the years you want to transfer your disability tax credits to them. You will need to provide the CRA with examples of the support provided, the more examples, the better. I hope that provides you with some clarity. You’re welcome to reach out anytime.
Hi, my parents have been receiving ODSP for last few years. My sister has also been supporting them by providing financial assistance (shelter, they are living in her condo while paying a small amount of rent). My sister earns over 50K (gross) per year. I was wondering whether we could transfer the tax credit to her or not.
Hi Sima,
To answer your question, your parents can most likely transfer their disability tax credits to your sister. There are a couple other issues we would need to explore first, such as attendant care expenses, other non-refundable credits claimed, etc which can impact the amount received by claiming the DTC. I’ve sent you an email so we can discuss the specifics of your case in greater detail.
i always tought it would com in the form of a monthy cheque ? am i wrong ? i am 34 have sufferd for 6yrs with crohns disease , so i wold not personaly be allowed this money ? i would havto transfer it to a fam member ?
The disability tax credit (DTC) is a non-refundable tax credit that can be used every year when you or your caregiver files a tax return. You do need to have paid federal income tax, in order claim the credit in any given year. Often, when on ODSP, you will not have paid enough federal income tax in order to claim the non-refundable tax credit portion of the credit. This is why you may want to explore the option of transferring your DTCs to a relative.
Also, remember that getting approved for the DTC isn’t just about receiving the non-refundable tax credits. Getting approved for the DTC offers a number of additional benefits, such as the Registered Disability Savings Plan (RDSP), etc. Read more about the benefits, here
Hi there.
I am on ODSP and am 48 and have NO ONE to transfer this “DTC” too.
Is it worth applying and what is the charge for me for you to do it?
Thanks…
It’s worth it. There are a number of additional benefits you may be entitled to once you get approved for the disability tax credit. The Registered Disability Savings Plan (RDSP) being one of them. To read about some of the benefits of getting approved for the DTC,
This is too complicated and who can explain this with less verbage?
Hi Ugo, thank you for your feedback. I’ve sent you an email explaining a bit more about the disability tax credit. I look forward to hearing from you.
We’re do we apply for this credit
Hi Jenn,
You can apply for a free eligibility assessment here.
My 23 year old daughter lives with me, but my son in Ontario, who has a taxable income has been sending money to help support her since September 2010. Would we be able to transfer the disability tax credit to him??
Hi Karen, the support would have to be in the form of financial assistance towards either food, shelter or clothing expenses. Your son would have to have been providing financial assistance towards one of those three basic necessities during at least three months of each year you want to transfer your daughters disability credits to him (2010 and 2011 presumably). I’ve sent you an email with further details. I’m looking forward to hearing from you.
I would like to know if I qualify for this tax credit.
Hi Larry, the quickest way to determine if you qualify for the disability tax credit is to complete the quick Disability Tax Credit Assessment . If you have any questions, don’t hesitate to ask.