Lyme disease can have severe effects, but the issue of whether being diagnosed with it entitles someone to claim the disability tax credit recently came before the Tax Court.
The infectious disease is caused by bacteria that’s transmitted to people through the bite of blacklegged and western blacklegged ticks. It’s rare in Canada, with only about 2,600 reported cases in 2019, the most recent year for which data is available. If left untreated, it can result in severe symptoms that can last from months to years, including: severe headaches, intermittent muscle, joint, tendon and bone aches, heart palpitations, arthritis and neurological disorders. In rare cases, it can lead to death.
The case in question involved an Ontario taxpayer who appealed a decision by the Canada Revenue Agency to deny her the disability tax credit (DTC), a non-refundable tax credit that’s intended to recognize the impact of various non-itemizable, disability-related costs. For 2021, the value of the federal credit is $1,299, but add the provincial or territorial tax savings, and the combined tax savings can be worth up to $2,800, depending on your province.
To qualify, you must complete CRA Form T2201, Disability Tax Credit Certificate, upon which a medical practitioner must certify that the individual had a “severe and prolonged impairment in physical or mental function.”
In this case, the taxpayer had applied for the DTC for the 2010 through 2017 taxation years, but her claim was rejected. According to the CRA, it didn’t allow a DTC for any of the years claimed because the taxpayer had not provided any medical practitioner certification that she had impairment within the scope specified in the Income Tax Act as required for entitlement to the DTC.
At trial, which was held in September 2021, the taxpayer testified that throughout the 2010–2017 period, she had various afflictions, including, at various times, high fever, which in 2011 lasted a number of months (including seven days of hospitalization), severe joint pain, muscle pain and weakness, loss of balance, heart palpitations and extreme fatigue.
Further difficulties presented beyond 2017, and continue to the present. Her doctors were initially unable to diagnose the situation, but, in 2018, a diagnosis of Lyme disease (which had been previously suggested but rejected) was made. The taxpayer’s husband also testified at trial, confirming his wife’s testimony as to the various ailments she had experienced during the years in question.
The problem with the taxpayer’s DTC claim was with her certificate. It was signed by a physician who had been the taxpayer’s attending physician since 2010, but it was a “negative certificate,” meaning it did not certify the taxpayer’s impairments met the requirements of the Tax Act for the purpose of claiming the DTC.
In order to qualify for the DTC, an individual must have “one or more severe and prolonged impairments in physical or mental functions.” The impairments must be such that the individual’s ability to perform a basic activity of daily living is “markedly restricted” such that “all or substantially all of the time,” the individual is either unable, or “requires an inordinate amount of time,” to perform the activity. The basic activities are: mental functions necessary for everyday life, feeding or dressing oneself, speaking, hearing, bowel or bladder functions and walking.
If no single basic activity of daily living is markedly restricted, an individual can still qualify for the DTC if their ability to perform more than one basic activity is “significantly restricted,” and the “cumulative effect of these restrictions is tantamount to being markedly restricted in one’s ability to perform a basic activity of daily living.”
In the taxpayer’s case, the certificate indicated the taxpayer was not blind, not markedly restricted in speaking, hearing, walking, eliminating, feeding, dressing, or performing the mental functions necessary for everyday life, nor was life-sustaining therapy required, nor were there significant restrictions in any two or more of the above-referenced basic aspects.
Prior jurisprudence has found that being able to produce a “positive certificate” was mandatory to claim the DTC. In other words, a taxpayer can’t access the DTC without a doctor’s certification that they are living with the defined impairment.
“That means that the function of the (judge) is not to substitute his or her opinion for that of a physician, but to determine, based on medical evidence, whether a negative certificate should be treated as a positive certificate,” the Federal Court of Appeal wrote in 2002. “In the absence of conflicting testimony from another physician, it is difficult to envision a case in which the (judge), in these circumstances, could find that a negative certificate should be treated as a positive certificate.”
No physician orally testified in the current case, so the judge had no basis to question the medical opinions the taxpayer’s physician expressed in the DTC certificate. The judge, although sympathetic, had no choice but to dismiss the taxpayer’s appeal, thereby disallowing the DTC.
“Having full regard for the significant afflictions (the taxpayer) has suffered from, I do not view them as coming within the scope of the impairments Parliament has identified in establishing statutory criteria for DTC entitlement,” the judge wrote in his decision, released last week. “I rely on (the physician’s) medical opinions in this regard. Additionally, the evidence I heard provides no basis for contemplating that a ‘positive certificate’ from another physician could be in the offing.”