Complete Guide To Disability Income Support

Definition of Disability

One of the difficulties in qualifying for disability assistance is that “disability” as a term doesn’t have one cut-and-dry definition. Medical professionals can view disability differently than a person experiencing chronic symptoms that are out of the norm for them.

According to the American Psychological Association, there are three main disability models:

• Medical model: The medical model understands disability as a disruption or impairment of normal bodily function. The goal of this model is to return someone to a state of “normalcy”—or as close to it as possible—as fast as possible. This model also relies heavily on expert knowledge and clinicians who can diagnose formally.
• Social model: The social model treats disability as one of many core characteristics of personhood, equal to other characteristics, such as gender and race. Disability is understood as a mismatch between a person and their physical and social environment.
• Moral model: The moral model is often—but not exclusively—religion-tied and views disability as inherently connected to the disabled person’s or their family’s morality. This can have negative connotations like karma or positive ones that associate the pain and suffering of disability as a vehicle for showing strength and faith.

It’s imperative to understand these distinctions. Your self-perception as a person with a disability may not align with the eligibility criteria for a particular type of assistance.

Insurers rely primarily on the medical model to determine eligibility, but the Supreme Court of Canada increasingly recognizes the social model of disability in rulings on issues related to disability, which then trickles down to eligibility policy. Still, eligibility for the Disability Tax Credit, for example, continues to rely on a diagnosis from a medical professional.

If you want to apply for disability assistance, you’ll need to be a strong self-advocate aware of the model used by the particular government or institution you’re applying for assistance or coverage. The inconsistent definitions of disability and the multiple interpretive models available to inform them are unequivocally frustrating for people with disabilities and can leave them feeling like there’s a constantly moving target.

If an agency or company doesn’t explicitly state this information, you can always call or email to ask or have a care aid do so on your behalf. That will give you a better understanding of the criteria and any difficulties you might encounter while seeking the assistance you need.

Prevalence of Disabilities

The number of Canadians with disabilities is on the rise. Over one in four Canadians over the age of 15 reported having at least one disability in 2022, double the amount from 2012. This amounts to 8 million Canadians who self-report having some kind of disability. 72% of those people said they had some sort of accessibility barrier within the last year.

Federal Assistance Programs

The federal government of Canada has three support programs for individuals with disabilities.

• Canada Pension Plan (CPP) disability benefits: The Canada Pension Plan provides financial assistance to Canadians who contributed to the CPP and cannot work due to a disability.
• Employment Insurance (EI) sickness benefits: This program provides financial assistance for those unable to work due to illness or injury.
• Disability benefits for veterans: These payments are a form of financial recognition for service-related injuries or diseases affecting veterans.

Provincial and Territorial Support

Supplementary Income Options

• Employment income. You’re allowed to work on a disability income support program, but you must declare your income and not earn more than the eligible asset limits to stay in the program.
• Registered Disability Savings Plan (RDSP). Anything deposited into an RDSP is exempt from deduction as part of an income support program asset calculation. However, these funds cannot be accessed without penalty until the beneficiary turns 60.
• Inheritance. Inheritance is another way a person with a disability can supplement their income. However, any inheritance must be disclosed as part of a monthly income assessment and can’t go beyond prescribed asset limits to keep receiving the income benefit.
• Legal settlement. Legal settlements can constitute cash assets and, therefore, need to be declared. They may also be considered part of an asset calculation.
• Old Age Security. Provinces may have old age security pensions, usually if someone has paid into the plan by working in Canada. These plans may or may not be exempt, and it’s best to check with provincial or territorial officials.
• Canada Pension Plan. The Canada Pension Plan provides monthly income to those who have paid into the plan while working. This is generally considered an exempt category.

General Eligibility Requirements

According to the Government of Canada, you are eligible for disability benefits if you meet these criteria:

• You’re under the age of 65
• You’ve contributed enough to the Canada Pension Plan (CPP)
• Have a mental or physical disability that stops you from doing gainful work
• Have a disability that is long-term and indefinite or will likely result in death

There are also CPP post-retirement disability benefits for Canadians who meet the following eligibility criteria:

• You’re between the ages of 60 and 65
• You’ve sufficiently contributed to CPP
• You have a mental or physical disability that stops you from working
• You have a disability that is long-term and indefinite or will likely result in death
• You’ve been receiving CPP for more than 15 months or became disabled after your CPP start date

The exception to the above is for Quebec residents, who must apply instead to the Quebec Pension Plan (QPP) disability benefit for assistance if they meet any of the following criteria:

• You’ve worked exclusively in Quebec
• You live in Quebec and worked both in Quebec and another province or territory
• You live outside of Canada, your last province of residence was Quebec and you also worked in Quebec

If you were out of the workforce for long periods of time caring for children, the child-rearing provision may allow you to qualify for disability assistance.

If you had a spouse or common-law partner and are now divorced or separated, your benefits may be split according to credit splitting provisions.

Medical Condition Evaluation

All assistance programs require medical screening from a health professional. You should work with the professional who can make the best case for you to qualify, whether that’s your family doctor or a specialist. Nurse practitioners can also act as medical evaluators in some provinces.

Severe and Prolonged Disability

Disability income support in Canada is generally reserved for those with a longstanding disability that will not be rectified through therapy, medication or any other kind of medical intervention and prevents a serious barrier to participation in the workforce.

There are four steps to apply for disability benefits in Canada:

1. Submit your application form
2. Submit your medical form
3. Receive a response
4. Review your application status

Starting Your Application

The first step in the application process is to fill out your application form.

The application form differs based on whether or not you have a terminal illness. The government of Canada considers a terminal illness to be one where the person likely has six months or less to death.

Gathering Medical Information

Both doctors and nurse practitioners can fill out the medical professional form to qualify for CPP disability benefits. As with the application form, there are two different medical forms for disability assistance in Canada, one for terminal illnesses and another for non-terminal illnesses. Make sure you bring the right form to your healthcare professional.

You must print out the form for your medical professional to fill out. Some professionals will want to mail the form directly to the government, while others will give these forms back to you. Speak to your healthcare professional about what they plan to do.

Submission and Follow-Up

You can apply online by registering for or accessing your My Service Canada account, by mail, or in person with a paper application for disability benefits. You can submit your medical form through the same channels.

Once you’ve submitted your documents, the government will review them. The federal assistance program can take up to four months (120 days) to decide. The verdict will be delivered to you by mail. Ensure your address is accurate and set up mail forwarding with Canada Post if you plan on moving.

Assessing Financial Needs

While the process varies from government to government, need will be assessed based on your ability to work and earn a living that meets the minimum standard set in the province or territory. Your assets must also not exceed the allowable threshold set by each government body.

If you are deemed to have an earning potential below the threshold due to a disability, you will likely be approved for the program.

Employment and Earning While on Support

You can earn income by working while you are on disability income support. However, your benefits may be reassessed depending on your salary, and if your assets change month over month, your eligibility could be affected.

For example, you will no longer be eligible if you are left an inheritance from a wealthy family member that surpasses the maximum asset threshold.

Managing Benefit Income

Many community institutions, including your bank branch, will help you manage your benefit income to help it stretch as far as possible. If you qualify, you can also avail yourself of services like food banks and community assistance programs to defray costs further.

Disability Income Support and Loans

Unless it falls under one of the exemption categories, any kind of loan or outside assistance will be considered in your asset calculation by your province or territory. You may no longer be eligible for assistance if your account gets a cash windfall from a loan.

Many B and C lenders in Canada will recognize disability income for the purposes of loans. In most cases, you’ll need a letter from your doctor or specialist outlining the nature of your disability, a copy of your Disability Tax Credit certificate and proof of receiving benefits under a federal or provincial disability support program.

Pros

• Emergency and extended access to support: Loans can help you cover types of care not covered by other government programs or assistance. They can also help defray immediate one-time costs for costly visits not covered by insurance or provincial or private health care providers.
• Credit-building opportunity: Taking out and properly managing a loan can help you improve your credit score, which can be financially beneficial.
• Flexibility: Most disability support programs have strict spending restrictions for income that loans traditionally do not have.
• Improved quality of life: Loans can help you access capital to make home modifications or purchase assistive devices to improve your overall well-being.

Cons

• Benefits eligibility impact: The federal, provincial and territorial governments may consider a loan income, putting you in a worse overall position as they can reduce or eliminate your eligibility.
• Repayment challenges: The limited resources afforded by government assistance programs can make loan repayment difficult, especially during times of inflation when your money doesn’t go as far.
• Higher interest rates: Individuals with disabilities may be considered a higher risk applicant to a lender, leading to higher interest rates.
• Risk of debt cycle: If you’re struggling to repay your original loan, you may be forced to take out additional credit and enter a risky debt cycle.
• Stress and anxiety: Financial stress takes a significant mental toll, which can have serious impacts on physical health as well.
• Limited options: Without a job, some lenders may be hesitant to approve loans for people with disabilities, leaving you with only a limited range of options.

• Registered Disability Savings Plan (RDSP): A long-term savings plan that helps Canadians with disabilities save for the future, supplemented by government grants and bonds.
• Payday loans: Payday loans let individuals borrow against their next benefits cheque. They’re accessible to those receiving disability income, with minimal eligibility criteria. However, they can have interest rates as high as 600% APR, so they should be used as a measure of last resort.
• Installment loans: Installment loans allow you to receive a lump sum and pay it off in fixed installments. Interest rates can vary from about 20% to 50%, and terms range from three to 60 months.
• Line of credit: A line of credit lets you access funds to a certain limit and pay interest only on the amount you draw from. The interest can be high with a lower-tier lender and these can be more difficult to access due to credit score minimums.
• Cash advance apps: Cash advance apps provide small advances based on income, often with a flat fee. These are designed to help with immediate expenses.
• Specialized disability loans: These loans are designed for individuals with disabilities, addressing the unique needs of individuals with disabilities, including medical expenses or assistive devices. These loans often have flexible repayment terms with tailored options for people on disability support.

Disability Savings and Tax Credits

• Disability Tax Credit (DTC): The DTC is a non-refundable tax credit that lowers the income tax owed by individuals with severe and prolonged disabilities.
• Child Disability Benefit (CDB): The CDB is a Canadian tax-free monthly benefit for families caring for a child under 18 with severe disabilities.
• Canada Disability Savings Grant and Bond: Additional financial support for contributions made to RDSPs by the federal government for low-income individuals with disabilities.
• Federal Excise Gasoline Tax Refund: This tax refund is available to Canadians who cannot use public transportation due to a permanent mobility impairment.
• Canadian Dental Care Plan (CDCP): Dental care services are also available for individuals eligible for the DTC.

Additional Provincial Programs