Applications for the new, much anticipated Canada Disability Benefit (CDB) open on June 20. The tax-free monthly CDB payments are meant to provide financial support to qualifying people with disabilities. The program is administered by Service Canada and the first month of eligibility is June, with the first payments beginning in July for applications received and approved by June 30.
To qualify for the CDB, you must be between 18 and 64 years old and be approved for the disability tax credit (DTC). The DTC is a non-refundable tax credit that’s intended to recognize the impact of various non-itemizable, disability-related costs. For 2025, the value of the federal credit is 14.5 per cent of $10,138, or $1,470. But add the provincial or territorial tax savings and the combined annual value can be worth up to $3,200, depending on where you live.
To qualify for the DTC, you must complete the Canada Revenue Agency’s Form T2201, Disability Tax Credit Certificate, upon which a medical practitioner must certify that you have a “severe and prolonged impairment in physical or mental function.” This form can be completed online or in paper format.
Once the form is completed and sent in, the Canada Revenue Agency will either approve the DTC or deny it. If your application is denied, you can appeal the CRA’s decision to the Tax Court.
If you’re still under 18, you can apply for the CDB as early as age 17 1/2, but your application won’t be processed until your 18th birthday. This means that you won’t get an eligibility decision or any payments until after you turn 18.
Assuming you qualify, you’ll begin receiving CDB payments the month after your application is received and approved. But don’t panic if you don’t get approved right away. If you only find out about the CDB well after July 2025, you can get back payments for past months that you were eligible for, but only for up to 24 months from when the government gets your application (and only for months from July 2025 onwards).
Individuals who have been approved for the DTC and who meet most of the eligibility criteria will likely have already received a letter this month that includes a unique application code and instructions on how to apply.
To complete the application, you’ll need your social insurance number and your direct deposit information, as Service Canada is encouraging all applicants to sign up for direct deposit for the “fastest and most reliable way to get your payments.” If you didn’t receive a letter from the government with an application code but you still think you’re eligible for the CDB, you can still apply, but you will also need to provide your mailing address and your net income from line 23600 of your recent 2024 notice of assessment.
Applications for the CDB can be submitted on the web via the application portal, by phone and in person at a Service Canada Centre as of June 20.
To apply for the CDB, you and your spouse or common-law partner (if applicable) must have filed your 2024 federal income tax return(s), and you must be a Canadian resident for income tax filing purposes, among other criteria.
Benefit amounts for the July 2025 to June 2026 payment period are calculated using your adjusted family net income for the 2024 tax year. The maximum amount you could receive from July 2025 to June 2026 is $2,400 ($200 per month). This amount will be adjusted upwards for inflation each year to reflect changes in the cost of living.
Because the CDB is an income-tested benefit, the benefit amount you will receive will start to decrease after your “adjusted family net income” reaches a certain threshold. This is basically equal to your combined family net income as reported on line 23600 of both you and your spouse or partner’s returns. If your adjusted family net income is considerably above that threshold, your benefit amount could be zero.
How exactly your income affects your benefit amount is complicated and will depend on three factors: your marital status; whether you and/or your spouse or partner have income from employment or self-employment and whether you and your spouse or are both receiving the CDB.
Note that a certain amount of income from employment or self-employment is excluded when calculating your benefit amount. This is called the “working income exemption.” If you are single, up to $10,000 of working income will be exempt, and if you’re married or living common-law, up to $14,000 of combined working income will be exempt.
The government has provided an estimator to find out how much money you could get from the CDB. To get an accurate estimate, start with your and your spouse’s or partner’s 2024 notices of assessment to input the exact numbers from various lines on the assessments.
Finally, keep in mind that the DTC not only entitles you to the new CDB, but it’s also the gateway credit to opening up a registered disability savings plan (RDSP). These plans are designed to help build long-term savings for individuals with disabilities. Individuals may contribute up to $200,000 on behalf of a beneficiary who qualifies for the DTC. There is no tax on earnings or growth while in the plan.
In addition to the power of tax-deferred compounding, Canada Disability Savings Grants (CDSGs), with a lifetime maximum of $70,000 per beneficiary, and Canada Disability Savings Bonds (CDSBs), with a lifetime maximum of $20,000 per beneficiary, may be received up until the end of the year in which the beneficiary turns 49, depending on family income.
Original contributions are not taxed when disability assistance payments are ultimately made to the beneficiary, but earnings, growth and government assistance are included in the beneficiary’s income. If the beneficiary has zero or minimal other income, the basic personal amount combined with the DTC may allow most or all of the funds to come out of the RDSP tax-free.