When Robert Morley got the news that his application for the federal disability tax credit (DTC) had been denied in December 2019, he felt a mix of emotions, he said.

“On the one hand, I wasn’t at all surprised. On the other, I had kind of hoped that [since] I’ve been approved once, they would know I have the disability.”

Morley, 49, was diagnosed with myalgic encephalomyelitis, commonly known as chronic fatigue syndrome, in 2010. The condition means even the small, routine tasks of everyday living leave him utterly exhausted and in need of prolonged rest, he said.

“If I shower, I have to take a break,” he said. “If I cook a meal, I have to take a break. I can’t go out. I can’t see friends.”

And the illness makes him unable to work, he said.

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But it wasn’t until 2015, after a byzantine bureaucratic process and multiple initial denials, that the Canada Revenue Agency (CRA) approved him for the DTC, a non-refundable credit for people with disabilities and their families.

At the time, the agency made the approval retroactive to the 2006 tax year, when Morley’s condition started.

2:05 CRA denies criteria change for disability tax credit, will review rejected application CRA denies criteria change for disability tax credit, will review rejected application

But the CRA also told him he’d have to re-apply for the DTC in 2019, so the agency could reassess his eligibility for the tax break.

That deadline had been looming large for Morley’s partner, Patrick, who told Global News he started to feel anxious months ahead of the new DTC application as memories came back of the couple’s first, multi-year attempt to claim the credit.

“I felt stressed about this all year, knowing the difficulty we had the first time.”

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The credit works out to around $1,500 to $2,000 per year, a significant amount for the couple, who lives on Patrick’s modest income as a communications coordinator at a non-profit, Morley said.

Despite their apprehension, the couple had held out hope their second time applying for the credit would go smoothly. After all, the CRA had already approved Morley once, and his doctor agreed the condition had not improved since then.

Instead, their application was denied. In August, the couple received a first denial letter from the CRA, stating: “Although we do not question the seriousness of your medical condition, we must base the decision on the specific eligibility criteria in the Income Tax Act.”

“Based on the information we received,” the letter continues, “you do not meet the eligibility criteria because the cumulative effect of your restrictions is not equivalent to a marked restriction in one basic activity of daily living.”

That obscure language is familiar to anyone who’s been dealing with the DTC.

Canadians with disabilities have to pay a physician or other qualified health professional to certify that they are “markedly” restricted in at least one activity of daily living all or most of the time, or that the cumulative effect of restrictions across several activities is equivalent to being markedly restricted on one basic activity. (Those who require life-sustaining therapy at least three times a week, for a total of at least 14 hours a week, also qualify for the credit.)

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A copy of Morley’s DTC application viewed by Global News shows his doctor deemed that while he doesn’t meet the bar for a “marked restriction,” the sum of his symptoms — which include cognitive impairment and difficulty walking — is equivalent to a marked restriction.

2:47 Verdun woman denied disability insurance Verdun woman denied disability insurance

Accessing the DTC is a struggle, experts say, especially for those with ‘invisible disabilities’

Being approved for the DTC once does not guarantee reapproval, even for disabilities that are widely known to be lifelong conditions, said Jennifer Zwicker, director of health policy at the University of Calgary’s School of Public Policy.

Families with dependents with autism, for example, are often asked to reapply for the DTC every few years, Zwicker said.

“It’s concerning because it’s not like autism is going to go away.” Tweet This

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In general, qualifying for the DTC has become significantly harder over the past five years or so, said Jason Heath, a financial planner in Thornhill, Ont., who’s helped many clients apply for the credit.

“It was very common in the past for a child with a learning disability, for example, to qualify for the disability tax credit,” he said.

While the rules for accessing the DTC haven’t changed, the way the CRA interprets them seems to have become stricter, he added.

A 2018 paper co-authored by Zwicker found that only 40 per cent of adults who live with a severe disability in Canada use the DTC. The study also suggested the rules used by the CRA to assess eligibility for the credit are likely one of the main reasons for the poor uptake.

The application form has a check-the-box format that doesn’t fit the reality of many disabilities, the report suggested. Physicians sometimes struggle to describe how the applicant’s disability affects their daily lives, and sometimes they receive confusing follow-up requests from the CRA for additional information, according to the report.

There is also a lack of consistency and transparency in how the tax agency reviews applications.

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In Morley’s case, documents reviewed by Global News show doctors struggling to fill the forms correctly. Morley also said the CRA failed to notify him of follow-up requests to the physicians, which made it difficult for him to ensure additional information would be sent back to the agency by the deadline.

People with so-called “invisible disabilities” are especially likely to struggle to access the DTC, both Zwicker and Heath said.

Those who are deemed ineligible are denied not only the possibility to pay lower taxes but also access to a number of other, often more financially significant benefits.

Among them is the Registered Disability Savings Plan (RDSP), a registered savings plan that’s eligible for a lifetime maximum of up to $70,000 in government matching grants and $20,000 in government bonds.

2:13 Moncton man with diabetes denied disability tax credit Moncton man with diabetes denied disability tax credit

Change afoot in Ottawa

The good news for Morley and others in a similar situation is Ottawa has taken steps to address the issues around the DTC.

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In its 2019 budget, the Trudeau government proposed to axe a rule that requires those who lose their eligibility for the DTC to close their RDSP and return to the government any grants or bonds received in the previous 10 years.

The new rules “intended to come into effect on January 1, 2021, and would become law when the enabling legislation receives Royal Assent,” a spokesperson at the Ministry of Finance told Global News via email.

In the meantime, RDSP issues aren’t required to close an RDSP account simply because its beneficiary is no longer eligible for the DTC, the ministry also said.

Still, those who lose eligibility for the DTC still stand to lose access to any future government RDSP contributions.

Efforts are underway to improve the DTC application and review process as well.

In 2017, public outcry over denials of DTC prompted the Liberal government to reinstate the Disability Advisory Committee (DAC), a body tasked with providing advice to the CRA that was disbanded by the Harper government in 2006.

Last year, the committee published a report with detailed recommendations for an overhaul of the DTC, including rewriting the eligibility criteria, streamlining the application process and making the tax credit refundable.

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The report also notes: “a particular concern is a notable increase in the rejections of individuals reapplying for the DTC after receiving it for 5, 10, and 20-plus years, even though their medical condition remains the same.”

While some of the committee’s recommendations require legislative action, the CRA told Global News it’s on track to implement most, if not all, of the recommended administrative changes by the spring of 2020.

“The CRA is proud to support the important work of the Disability Advisory Committee and is committed to providing open, transparent and ongoing communications to Canadians on the progress made by the Committee to help improve the lives of Canadians living with disabilities,” the agency said via email.

Among the changes already adopted are a redesigned application form, the ability to file electronically and a new “navigator” role to liaise among the applicant, the CRA, and medical practitioners.

For his part, Morley said he and Patrick are planning to take their case to the Tax Court of Canada.

“There’s something so desperately wrong here.”