Lessons Learned: The DTC Appeal Process [Part III]

As noted in my last post, applying (or re-applying) for the DTC involves having the relevant medical
practitioner provide the required information on the T2201 form. Depending on the extent of the
individual's challenges, you might want to consider having the medical practitioner send along an additional letter or report with the application form.

I.   The Appeal Route: Roads Not Taken?
There are three possible methods to challenge an initial denial of he DTC; namely

• reapply for the DTC;
• request an informal review; and/or
• file a Notice of Objection (formal appeal).

Although you can re-apply at any time, unless something has changed (or you now have significant new medical information to provide) with the person's situation, you are probably just as well (or better) off to proceed through the appeal route.

Whether proceeding with an informal review or a Notice of Objection, you will want to highlight
specific information found in the T2201 form and any included correspondence that shows how the effects of the person's impairments on their ability to perform the Activities of Daily Living. Remember, you are now providing  information to an individual who has no prior knowledge of the situation and must highlight for him or her the facts that you believe makes the person eligible for the DTC.

You have one year from the date of the denial to request an informal review but only 90 days to pursue the more formal Notice of Objection. If this timing sounds illogical to you, I agree but it is what it is.

Unfortunately, this timing issue can make things a little more complicated. As it could take anywhere from six months to two years to receive a response to your request for an informal review, you might well still be waiting for that response as you approach the one-year time limit to file a formal Notice of Objection. For this reason, you need to document your timelines carefully and make sure you file a Notice of Objection two or three weeks prior to the one-year time limit, even if you haven't yet received a response to your informal review.

II.  The So-called Requirement of 'Additional Medical Information"

Whichever route you take, it's important to include any new medical information that you have not already supplied, such as new or updated medical reports, or an additional letter from a medical practitioner who is familiar with the situation. This additional information will clearly focus on how the impairment affects the activities of daily living.

However, it's important to realize that although you can (and should) supply any additional helpful medical information you can, you are most certainly not obligated to do so.

This is extremely important because the CRA appears to have taken the ludicrous (and totally unsupported) position that it CANNOT and WILL NOT review any application unless additional medical information has been provided.

This is exactly what occurred when I requested an informal review of the denial of my youngest daughter's re application for the DTC and it's flatout not true. This position violates not only the
CRA's own Taxpayer Bill of Rights, but also the broader legal principle that when appealing a government decision you have the right to have that decision reviewed by an independent party (someone not involved in the original decision) whether or not you have new information to provide.

Whether a review or appeal, should you receive such a response, know that the CRA is simply up to  its old tricks. Unfortunately, too many people don't realize this and once they receive a letter denying their request for a review, they simply move on. Thank goodness I (and now you) know differently. If you receive such a response, simply move on to the next level of appeal and file a Notice of Objection.

III. The Notice of Objection
The procedure for filing a Notice of Objection is set out here, along with information as to the  documentation required. Note that there is no mention of a requirement to provide any additional medical information, only the "relevant facts and reasons for your objection" and "copies of all documents that support your objection". This supporting documentation will often be as simple as the T2201 form you originally sent to the CRA (along with any additional material that might have been attached).

It appears that the CRA is effectively requiring the majority of DTC applicants to reach this level before providing any semblance of due process. Unless your case is an obvious slam dunk (as occurred with my daughter and other situations I've recently become aware of), you can expect to receive a phone call from the authorized CRA officer prior to the the final decision being made.

V. The Tax Court of Canada
Should your Notice of Objection be dismissed, you have one final avenue of appeal to the Tax Court of Canada. However, I cannot recommend you take on this level of appeal without legal counsel.

VI. One Final Step: the Service Complaint
You also have the right to lodge a service complaint with the Office of the Taxpayer's Ombudsman. Please don't write this step off as a waste of time.

One of the issues noted in the "2019 First Annual Report of the Disability Advisory Committee: Enabling access to disability tax measures – Report in brief"was that the CRA doesn't
adequately share information about the results of objections or appeals with its employees, which negatively affects the Agency's ability to  improve its performance. Assessment decisions that are overturned  may signal inconsistencies in assessment or objection processes and sharing such information should reduce the numbers of objections and appeals.

The  CRA agreed and has explained that it is committed to ensuring that objection and appeal decisions are shared with all assessing and audit areas.

Let's do our part to give them a little shove push in that direction.

* With a tip of the hat and many thanks to Dan Paladin of Padalin Disability Tax Credit Solutions.

Lessons Learned; Appealing a Denial of the Disability Tax Credit [Part II]

In the last post, we looked at some of the many issues surrounding the eligibility requirements for the Disability Tax Credit ("DTC") and I promised to discuss the DTC appeal process, including some lessons I recently learned in successfully appealing the denial of my daughter's re- application for the DTC.

However, before doing that, I would like to discuss some of the tricks the CRA has been using to deny eligibility in the first place, hoping that arming you with this additional information might well help you be more successful in either your initial application or any required appeal.

Even though the actual eligibility requirements haven't changed, the interpretation of those provisions have become significantly tighter such that CRA agents are now imposing stipulations not prescribed by the legislation. Put another way, the CRA is (and one must wonder if intentionally) making errors in law. After all, it's not like these issues haven't been previously brought to its attention. Many. Many. Times.

There was the 2017 issue with respect to the eligibility of applicants with Type 2 diabetes:

Last May, the CRA told its staff not to honour claims for the disability tax credit. The agency had concluded that Type 1 diabetics were not using 14 hours of their time each week to manage their insulin therapy, which was the minimum required in the agency’s view.

Once disability advocates learned of that move and went public, the CRA promised to revert to the previous clarification letter (basically meaning they " took it back") and agreed to review all denied applications dating back to the date the revised rule was put in place.

Then there are the CRA guidelines* that require that impairment due to mental illness be present continuously for 90 per cent of the time. In addition to the fact that the 90% figure is found only in the CRA policy and has no basis in law, the very nature of mental health disabilities means it is often “temporary, episodic and changing in nature, with symptoms varying in severity and duration over the course of peoples’ lives”. Sadly, data from the fiscal year 2016 to 2017 showing a 53% increase in the number of rejections of applications from people living with mental illness is no surprise.

Being Proactive with More Difficult Applications

Applying (or re-applying) for the DTC involves having the relevant medical practitioner** provide the required information in the T2201 form. Although this process mostly involves checking off
affirmative or negative responses and filling in a few blanks, there are some places for additional information to be wrote in.

Don't let the fact that the T2201 form states that "working, housekeeping, managing a bank account, and social or recreational activities are not considered basic activities of daily living. Basic activities of daily living are limited to walking, speaking, hearing, dressing, feeding, eliminating (bowel or bladder functions), and mental functions necessary for everyday life" deter you. Ignore and carry on.

For individuals with obvious severe disabilities, the form,itself, should likely be sufficient. However, depending on the extent of the challenges faced, you might want to consider having the medical practitioner send along an additional letter or report with the application form.

As we all know, some disabilities are much recognizable and relatable to the uninitiated than others. For this reason, it is wise to proceed with a little more care if (for example) the applicant has a learning disability or a  number of smaller impairments in many activities of daily living ("ADL"). The challenges brought about by some disabilities take more time and detail to fully explain and in other situations, although the level of impairment in any particular ADL might not meet the required degree of impairment, often the cumulative effects in all areas of daily living might qualify as a "significant restriction"(the equivalent of being markedly restricted in one basic ADL).

In such situations, I recommend you book an additional or lengthier appointment with the medical practitioner so you can provide additional information (both for the benefit of the medical practitioner and the CRA) as to the extent of the effects of the individual's daily functioning. We're looking for practical examples of how the individual's particular challenges affect their day-to-day living as that information is critical when it comes to meeting the eligibility requirements.

A few very important things to remember here:
Before doing this, make sure that you have taken the time to compile in written form  the details you want to provide; although you will verbally pass this information on to the medical practitioner, you want to make sure you don't miss anything and you never know which piece of evidence might be sufficient to break the CRA's back.

Depending on the extent of the individual's challenges and insight, it might well be worthwhile to compile this list with the help of the individual and have them participate in the appointment. Although the process of getting these practical examples from my adult daughter often felt like "pulling teeth", with perseverance and persistence, we were able to provide the psychologist with an impressive list of practical effects that she had no other way of knowing, even as the "treating professional".

Further, be aware of the language used in any such written material - perfectly normal words such as "could", "might" or "should" can and will be relied on by the CRA to deny eligibility. That's part of the reason why real-life examples of how the challenges impact the person's daily life are so critical - it totally reduces the need for speculation (which can and will be used against you).

Stay tuned for a further detailed discussion of the DTC appeal process and the pitfalls to avoid.

* Note that "guidelines" do not have the legal force of law. To be valid, regulations, "guideline" and "policy" cannot contradict the enabling legislation.

** The appropriate medical practitioner will be a medical doctor, nurse practitioner, optometrist, audiologist. occupational therapist, physiotherapist, psychologist or speech-language pathologist, depending on the disability involved; however, whenever possible I recommend using the most specialized professional in the relevant field (for example, it is better to use a neurologist than a family doctor).