Once you have exceeded the threshold, the benefit is reduced at a rate of $0.20 per dollar of income.
When will the new Canada Disability Benefit begin?
Applications open on June 20, 2025, and the first Canada Disability Benefit payments will go out in July (for applications received and approved by June 30, 2025). The benefit will be administered by Service Canada. Much like with the Canadian Dental Care Plan, those the government has identified as eligible will receive a letter and be directed towards an online portal, but you can also apply via phone or in-person at a Service Canada location. The most efficient way to receive government payments is to sign up for direct deposit to your bank account.
Will other disability benefits be clawed back?
All provinces and territories except Alberta have committed to not clawing back the Canada Disability Benefit, according to Disability Without Poverty.
This is a significant change in fiscal policy when it comes to disability support funding. In the past, with programs like the Canada Emergency Response Benefit (CERB), many provinces clawed back the pandemic-related assistance for those receiving social assistance such as Alberta’s Assured Income for the Severely Handicapped (AISH) or the Ontario Disability Support Program (ODSP). Historically, the provinces have varied widely when it comes to how they implement their disability support programs.
Who is eligible for the new Canada Disability Benefit?
In order to be eligible for the Canada Disability Benefit you must have received approval for the disability tax credit (DTC). The DTC is the bar for entry when it comes to many provincial and federal disability support programs.
The Canada Disability Benefit also has some other requirements. You have to be aged between 18 and 64, and you can’t be incarcerated. If you are incarcerated and become ineligible, the rules state that you must reapply once you have served your sentence. These checkboxes are in addition to ones typical of federal programs, including:
- The need to file your previous year’s tax return
- You have to be a Canadian resident—whether that’s as a citizen, a permanent resident, a protected person, a person with rights under the Indian Act, or a temporary resident who has lived in the country for at least 18 months.
If you are older than 64, you may be able to apply for two years of back payments, with the earliest date being July 2025. If you are younger than 18, you are allowed to apply when you are 17 and a half, with benefits commencing on your 18th birthday.
What is the disability tax credit?
The disability tax credit (DTC) is one of the longest-standing disability support programs in Canada. It first began in 1988 and is the criteria for entry for many disability support programs. However, the DTC is underused, and many Canadians with disabilities who likely qualify for it have not yet applied.
In order to be eligible for the DTC, you must have a physician fill out a lengthy form that assesses how your disability, or disabilities, affect your life. What the government is looking for a “marked restriction.” This means that a disability creates a situation where an activity takes you three times as long as someone like you who doesn’t have a disability, if you can do it at all. In order to be considered, your disability must be present 90% of the time or more and have lasted for at least a year.
While the DTC does entitle you to claim a sizable tax credit—$9,872 for the 2024 tax year—DTC eligibility is also a requirement for participation in other federal programs, such as the registered disability savings plan (RDSP), the child disability benefit and the Canada Workers Benefit disability supplement.
