Youth in Transition

Youth in Transition

Is your child with a disability in transition from child to adult?  There are transitions at a variety of dates:

  • in the year the child turns 18
  • on the birthdate of the child who turns 18
  • at the date the child turns 19

Bloorview Kids Rehab has a checklist and a timeline (Use the search this site box for "checklist" to bring up a variety of publications and forms)

Tax Credits to be aware of:

Disability Amount must be claimed by the child and transferred to the parent

Transfer of Disability Amount for a Child does not end when the child turns 18.  The transfer is dependent on the child's income.  If the child can use the credit because they are earning income, then they must use it up first.  If they don't use it all, the remainder may be transferred.  It can not be carried forward.  It can only be used in the year.

Disability Supplement for Child (under age 18) ends in the year the child turns 18.

There is a clawback to Disability Supplement for attendant care and / or child care claimed as paid by anyone for the child.  This includes another family member, not just the parent claiming the child.

Additional Tax Credits parents or other supportive family (and adult children with parents they support) should review their eligibility to claim these credits for Youth in Transition (also includes 
Seniors in Transition):

  1. Amount for eligible dependent (single parents only and child must be living with you and have a  mental or physical infirmity (Infirmity does not have the same definition as Disability) 
  2. Amount for infirm dependent over 18 (doesn't have to be living with you)
  3. Caregiver amount (has to be living with you)
  4. Top up Provision - use Federal and Provincial/Territorial TD1 worksheets to calculate top up or Schedule 5 of tax software

Always complete the Dependent window and prepare tax returns for all family who are dependent on you together as a family unit in order to determine eligiblity for credits and transfer of credits between family members.

Each of these credits above are different and more than one may apply to your situation.  You may have multiple persons in your family to which these credits apply.  They have different thresholds for income and different parameters and again, check the top up provisions if you prepare your return manually or even if you don't.  Some credits are transferrable, others can be split between supportive family.  

Check out the CRA website for information about all tax credits on Lines 300-378:

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/menu-eng.html

GST Credits (you need your SIN number for this credit)

If you have not already applied, apply for a Social Insurance Number.  You will find applications forms online at www.HRDC.gc.ca, or at your local Canada Post Outlet or ask your local Librarian to assist.

Example dates to watch for:

  • Current year: you turned 18 before April 1, 2008
  • Last year: you turned 18 in 2007
  • Next year: you turn 19 before April 1, 2009

File the 2007 tax return even if you have no income or tax payable to trigger the application for the GST Credit if you will turn 19 before April 1, 2009. 

If you will turn 19 years of age before April 1 of the next year (2009), you can apply for the GST credit on your tax return for last year (2007). 

When you turn 19 during 2008 or in the first 3 months of 2009, the GST/HST credit will be paid out.

Rquest that the GST Credit calculation be activated by selecting YES to answer the question Are you applying for the GST/HST credit on page one of the return.

http://www.cra-arc.gc.ca/E/pub/tg/rc4210/README.html

 

Child Tax Benefits and Child Disability Benefit 

If your child is under 18 and has qualified for the Disability Tax Credit, you might not know you are eligible for tax free funds.

The threshold for the CDB tops out at over $157,000 in family income. If you didn't know that the threshold increased and were not eligible for the Child Tax Credit, you might not know to apply anyway to access partial payment for the Child Disability Benefit.

CCTB eligibility ends when a child turns 18.

The Child Disability Benefit (maximum $2,300 tax free funding) ends when the child turns 18.

http://www.cra-arc.gc.ca/bnfts/cctb/fq_qlfyng-eng.html

 

 

At 18, the CCTB stops, but that's when the province kicks in with PWD, (Person's with Disability Benefits or whatever they calling it now...)

This is the year you'll be applying to the province for income, which is reported, but then reversed out below net income, before taxble income.  That's because BC Medical and other benefit programs are calculated based on net income on your tax return and they want social assistance included in those calculations. 

At this point you also apply for BC Medical Plan and then qualify for premium assistance because of course, income is low. http://www.health.gov.bc.ca/msp/

And... the Committeeship issue comes up at this point because of the Trustee Act and the Public Guardianship and Trustee of BC...  This is where it's best to speak with the experts/lawyer or attend a workshop at www.plan.ca about how to structure your affairs.  When your child turns 18, you can't just sign for them anymore. As an adult if they aren't competent to sign for themselves, they must have an authorized legal representative.  

Did you know there's a 25% reduction in premiums for ICBC?

http://www.icbc.com/autoplan/costs/save-money/disability-discount

which is dependent on qualifying for the fuel tax rebate provincially

http://www.sbr.gov.bc.ca/business/Consumer_Taxes/MotorFuelTax_CarbonTax/mft_ct.htm

and there's a federal fuel gas excise tax refund

  http://www.cra-arc.gc.ca/E/pbg/ef/xe8/README.html

 

Lots to do when you reach the age of majority... 

Medical expenses  - claim net of 3% limited to maximum $10,000 and dependency must be proven in the year the child turns 18 years of age!!

Line 330

Claim on Line 330 if child born in 1990 or later - child under 18 in 2007 (for 2007 Tax return)

Line 331

Claim for dependents net of 3% of their net income to a maximum $10,000 if born in 1989 or earlier - child turned 18 in 2007 (for 2007 Tax return)

 

Registered Disability Savings Plan

Capital can't be locked down on plans where child is an adult when the plan is initiated. 

Adult may currently opt out of their RDSP by voluntary de-certification for Disability Tax Credit.  De-certification will mean loss of bonds (maximum $20,000) and grants (maximum $70,000) which must be repaid if not vested, but could access capital (maximum ($200,000) and income earned without waiting till age 60.  

An RDSP becomes asset of the beneficiary and estate planning should be considered.  Consequences of dying without a will in each province/territory are different and should be considered by the beneficiary and/or family of the beneficiary of an RDSP.   If family have concerns about competence to create a will or about administering an RDSP, contact Planned Lifetime Advocacy Network (www.plan.ca) for assistance. 

 

If you heard that IQ is a criteria for disability benefits in BC, that's not quite the story

... here's the scoop:

IQ 70 is not a criteria for receiving disability benefits.  Disability benefits are granted in a wide range of situations including developmental, mental health and physical. 
 
In order to receive disability benefits a client would need an assessment by a physician or other qualified health professional who can attest to and describe how their patient meets the criteria under the Employment and Assistance for Persons with Disabilities Act.
 
The issue of IQ 70 relates to eligibility requirements for adult community living services.
 
It is based on existing policy and does not change how client eligibility for adult community living services is assessed.  IQ 70 was incorporated as a legislative regulatory amendment in the Community Living Authority Act based on a court decision the criteria must be legislated.

 

Disability Supports Deduction

If your 'youth in transition starts to work, they may be able to claim a significant number of medical expenses as an expense instead of a credit.  Check out form T929 for the Disability Supports Deduction on Line 215.

Why would it matter whether it's a credit or a deduction?  Deductions reduces net income before you calculate tax payable.  There is no 3% threshold before you qualify, it's on every dollar.  There is no carryforward and no ability to transfer the amounts paid though.  There is also no ability like there is with medical expenses to claim for any 12 months that end in the taxation year.

The medical expense tax credit is reduced by 3% of net income and then the tax credit reduces tax payable on net income.  Medical expenses paid by a third party may be claimed on Line 331.  Medical expenses are claimed after a 3% threshold is exceeded and there is a maximum threshold over which everything is claimable.  You may stagger the claim to take advantage of income in one year or another depending on which 12 months that end in the year are claimed.

Now that you are totally confused, try claiming the deduction and alternatively, try claiming the medical expense using tax software to see the difference on the tax payable line.

 

WCB is on the lookout for safety of young workers...

The young worker safety movement is growing. See the stories...

Get on board at www.raiseyourhand.com.

 

 

 

NEW!!  Planning a family outing that includes BC Parks this summer?

Check out BC Parks documentation required for reduced campsite and parking fees for persons with disabiities!  Includes children in At Home program!




 

 

 

 
 
 
 
 
 
 
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