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2004 Vote for Equality - Home
> Issues > Federal Budget 2004
Federal
Budget: Budget Plan
- Persons
With Disabilities
(pages 17 - 22)
March 23, 2004
Inclusion
of Persons With Disabilities
The Government
of Canada views greater inclusion of Canadians with disabilities as
a national priority. Greater inclusion contributes not only to the
well-being of persons with disabilities themselves, but also to the
life and economy of the country through the contributions citizens
make as they learn, work and volunteer.
Improving
Tax Fairness for Persons With Disabilities and Caregivers
The Government
is committed to improving tax fairness for persons with disabilities
and those who care for them. In recent years a number of tax measures
have been enhanced to recognize that persons with disabilities and
those who care for them face extra non-discretionary costs that reduce
their ability to pay tax. Since 1996 tax relief for persons with disabilities
or above-average medical expenses and those who care for them has
more than doubled from $600 million to more than $1.2 billion annually.
In the 2003 budget
the Government established the Technical Advisory Committee on Tax
Measures for Persons with Disabilities to advise the Minister of Finance
and the Minister of National Revenue on tax issues affecting the community
of persons with disabilities. The Technical Advisory Committee comprises
members of organizations representing persons with disabilities, medical
practitioners and private sector tax experts. It is scheduled to report
in the fall of 2004. The 2003 budget also set aside $25 million in
2003–04 and $80 million annually, starting in 2004–05, to
improve the fairness of the tax system for persons with disabilities
and those who care for them, based on the findings of the committee.
The $25 million set aside for 2003–04 has been reprofiled to
future years.
This budget acts
on an early proposal by the Technical Advisory Committee to provide
better tax recognition of disability supports expenses, and improves
the tax recognition of medical expenses incurred by caregivers on
behalf of dependent relatives.
Better Tax
Recognition of Disability Supports Expenses
Based on its work
to date, the Technical Advisory Committee has proposed that the Government
address concerns raised by the community of persons with disabilities
regarding the recognition of the costs of disability supports required
for employment or education (for example, sign language interpreters
and talking textbooks). Currently such supports are recognized under
the medical expense tax credit (METC), which can result in income-tested
benefits such as the goods and services tax credit being reduced and
tax being paid on the income (including government assistance) used
to purchase disability supports.
The budget proposes
to create a new deduction for disability supports, which will allow
expenses in respect of disability supports to be deducted from income
if they are incurred for education or employment purposes. As a result,
income used to pay for these expenses will not be taxed and will not
affect income-tested benefits.
This measure will
be effective as of the 2004 taxation year. It is estimated to cost
$15 million annually and will be funded from amounts set aside in
the 2003 budget.
Better Tax
Recognition of Caregiver Expenses
This budget also
proposes a measure to better recognize expenses incurred by caregivers.
Many Canadians
provide care and support to adult family members, particularly elderly
parents or grandparents or adult children with disabilities. Through
measures such as the eligible dependant credit, the infirm dependant
credit and the caregiver credit, the personal income tax system currently
provides tax relief in recognition of the extra basic living expenses
associated with providing support or care.
However, in many
cases, caregivers incur medical and disability-related expenses, in
addition to basic living expenses, for a dependent relative. While
taxpayers paying such expenses for a spouse (and, in most cases, a
minor child) can generally claim these expenses under the METC, the
ability to claim medical expenses incurred for other dependent relatives
under the METC is very limited.
To address this
issue, this budget proposes to allow caregivers to claim more of the
medical and disability-related expenses they incur on behalf of dependent
relatives. The amount of this claim will be capped at $5,000. This
measure will
better recognize the costs of caregivers and ensure they receive fair
recognition under the income tax system for medical and disability-related
costs they incur on behalf of dependent relatives.
This measure will
be effective as of the 2004 taxation year and is estimated to cost
$20 million in 2004–05 and $25 million in 2005–06.
Better Workplace
Integration
The Government
will also work with its partners—provincial and territorial governments,
employers and communities—to increase support for workplace integration
of persons with disabilities.
This budget provides
increased funding of $30 million annually in 2004–05 and subsequent
fiscal years for the recently negotiated federal-provincial-territorial
Multilateral Framework for Labour Market Agreements for Persons with
Disabilities. The Multilateral Framework is the successor to the Employability
Assistance for Persons with Disabilities program, under which the
Government of Canada currently contributes an ongoing $193 million
annually to support employment assistance programming for persons
with disabilities delivered by provincial and territorial governments.
This budget will bring total support under the Multilateral Framework
to $223 million annually.
The Government
will also ensure that its policies as the nation’s largest employer
do more to promote the hiring and retention of Canadians with disabilities
in government employment. It also intends to encourage similar action
on the part of private sector employers in the federally regulated
sector.
Reliable, up-to-date
information is also essential for identifying and addressing needs
for better workplace integration. Accordingly, this budget provides
funding to enable a second Participation and Activity Limitation Survey
to be conducted as part of the next census in 2006.
Facilitating
Transitions Into Employment
In addition to
providing greater support for workplace integration, governments need
to ensure that persons with disabilities are not penalized when they
decide to take up the challenge of reintegrating into the workforce.
In particular, both the federal and provincial governments—the
joint stewards of the Canada Pension Plan (CPP)—acknowledge the
need to facilitate voluntary reintegration by recipients of CPP disability
benefits into the workforce.
Currently recipients
of CPP disability benefits who attempt to return to work, but abandon
their efforts because of difficulties in overcoming their disability,
are required to reapply for disability benefits. The delays and uncertainty
associated with the need to reapply can discourage individuals from
returning to work. Accordingly, this budget proposes an amendment
to the CPP legislation that would allow for the reinstatement of disability
benefits if a former recipient is required to cease working for reasons
relating to his or her disability within two years of returning to
work.
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