Diabetes may qualify for the Disability Tax Credit in Canada through the life-sustaining therapy rules or because diabetes-related complications cause severe and prolonged limitations.
People with Type 1 diabetes meet the life-sustaining therapy eligibility criteria for the 2021 and later tax years. Type 2 diabetes does not automatically qualify, but some people may be eligible based on insulin therapy or the effect of serious complications.
The Disability Tax Credit is not based solely on whether you can work. A person may work and still qualify, while someone who is unable to work may not meet the DTC’s specific eligibility rules.
For information about income-replacement benefits when diabetes prevents you from working, read our guide to diabetes disability benefits in Canada.
On This Page:
- Does Diabetes Qualify?
- Type 1 Diabetes
- Type 2 Diabetes
- Other Ways to Qualify
- How to Apply
- If Your Application Is Denied
- Frequently Asked Questions
Does Diabetes Qualify for the Disability Tax Credit?
Diabetes can qualify for the Disability Tax Credit, but a diagnosis alone is not normally enough.
A person with diabetes may qualify through one of the following routes:
-
Life-sustaining therapy: Therapy is required to support a vital function and meets the CRA’s frequency, time and duration requirements.
-
Marked restriction: A severe and prolonged impairment leaves you unable to perform an eligible everyday activity, or it generally takes at least three times longer than it would for a person of similar age without the impairment.
-
Cumulative effect: Significant limitations in two or more eligible categories combine to create an effect equivalent to a marked restriction.
Restrictions generally must be present all or substantially all of the time and must have lasted, or be expected to last, for a continuous period of at least 12 months.
What Is the Disability Tax Credit?
The DTC is a non-refundable federal tax credit. It can reduce the amount of income tax that an eligible person or supporting family member may have to pay.
Approval may also provide access to other federal programs and benefits. It is not a monthly disability payment and does not replace lost employment income.
Does Type 1 Diabetes Qualify for the Disability Tax Credit?
People with Type 1 diabetes meet the life-sustaining therapy eligibility criteria for the 2021 and later tax years.
A medical practitioner no longer has to provide a detailed calculation of therapy time for those years. However, you must still submit a complete DTC application and receive approval from the Canada Revenue Agency.
Life-sustaining activities related to Type 1 diabetes may include:
-
Monitoring blood glucose levels
-
Calculating, adjusting and administering insulin
-
Changing insulin-pump tubing or insertion sites
-
Calibrating and maintaining necessary equipment
-
Ketone testing
-
Maintaining therapy-related blood glucose records
Does Type 2 Diabetes Qualify for the Disability Tax Credit?
Type 2 diabetes does not automatically qualify for the Disability Tax Credit. However, a person with Type 2 diabetes may qualify through life-sustaining therapy, a marked restriction or the cumulative effect of significant limitations.
Type 2 Diabetes and Insulin Therapy
A person who requires insulin therapy may qualify under the life-sustaining therapy rules if the applicable requirements are met.
For applicants who are not automatically covered by the Type 1 diabetes rule, therapy generally must:
-
Be required to support a vital function
-
Be needed at least twice per week
-
Require an average of at least 14 hours per week
-
Have lasted or be expected to last for at least 12 continuous months
Type 2 Diabetes Complications
A person may also qualify when diabetes complications severely restrict an eligible area of everyday functioning.
Relevant complications may include:
-
Vision loss caused by diabetic retinopathy
-
Difficulty walking because of neuropathy, ulcers or amputation
-
Kidney failure requiring dialysis
-
Severe cognitive or mental-function limitations
-
The combined effect of limitations in multiple categories
Learn more about whether Type 2 diabetes can qualify as a disability when it affects your ability to work.
What Diabetes Activities Count Toward Life-Sustaining Therapy?
The CRA does not count every activity associated with managing diabetes toward the life-sustaining therapy requirement.
Activities That May Count
-
Adjusting and administering medication
-
Determining medication dosage
-
Monitoring glucose when directly related to adjusting therapy
-
Maintaining therapy-related records
-
Setting up and maintaining treatment equipment
-
Time another person spends administering or supervising therapy for a child
Activities That Generally Do Not Count
-
Exercise
-
Travel to receive treatment
-
Picking up medication or supplies
-
Routine medical appointments that do not involve receiving therapy or determining medication dosage
-
Time a portable or implanted device passively delivers therapy
-
Ordinary meal preparation or dietary management that does not meet the CRA’s specific rules
How Do You Apply for the Diabetes Disability Tax Credit?
You apply using the Disability Tax Credit application, also known as Form T2201.
1. Complete Part A
The person with diabetes or their legal representative completes Part A. This section includes personal details and information about any supporting family member who may claim an unused portion of the credit.
2. Have a Medical Practitioner Complete Part B
A medical practitioner must certify the effects of the impairment or the need for life-sustaining therapy.
For life-sustaining therapy, a medical doctor or nurse practitioner can complete the certification.
3. Submit the Application
The application can be completed digitally or submitted by mail. Both parts must be completed using the same application method.
The CRA bases its decision largely on the information the medical practitioner provides about the therapy or functional limitations.
Describe Function, Not Just the Diagnosis
For applications based on complications, the form should explain what you can’t do, how long activities take and how frequently the restrictions affect you.
A statement that you have diabetes, neuropathy or vision problems may not fully explain why the DTC criteria are met.
Why Are Diabetes Disability Tax Credit Applications Denied?
A diabetes DTC application may be denied when the CRA decides that the information provided does not meet its eligibility rules.
Common problems may include:
-
The form describes the diagnosis but not the qualifying therapy or functional limitations
-
The therapy-time calculation includes activities the CRA does not count
-
The restrictions are not present all or substantially all of the time
-
The impairment is not expected to last at least 12 continuous months
-
The combined effect of multiple diabetes complications is not fully explained
-
Required information or signatures are missing
What Should You Do After a DTC Denial?
Review the CRA’s notice of determination and compare the reasons for denial with the information provided on Form T2201.
You may be able to request a review and submit updated medical information explaining how your situation meets the eligibility criteria. Other options may include filing a formal objection.
Keep copies of your application, medical records, therapy calculations and all correspondence from the CRA.
Frequently Asked Questions About Diabetes and the Disability Tax Credit
Does Type 1 diabetes automatically qualify for the DTC?
People with Type 1 diabetes meet the life-sustaining therapy eligibility criteria for the 2021 and later tax years. You must still submit a completed application and receive CRA approval.
Does Type 2 diabetes qualify for the Disability Tax Credit?
It may qualify through life-sustaining therapy, a marked restriction or the cumulative effect of significant limitations. Type 2 diabetes does not automatically qualify based on diagnosis alone.
Do you have to be unable to work to receive the DTC?
No. The DTC focuses on life-sustaining therapy and restrictions in everyday functioning. It does not use the same test as private disability insurance or CPP Disability.
Can a child with Type 1 diabetes qualify?
Yes. A child with Type 1 diabetes may qualify under the life-sustaining therapy rules. A supporting parent may be able to claim an unused portion of the disability amount.
Can you receive the DTC and long-term disability benefits?
Potentially. They are separate programs with different eligibility rules. Approval or denial under one program does not automatically determine the other.
Has Diabetes Prevented You From Working?
The Disability Tax Credit does not replace your employment income. If diabetes or its complications prevent you from working, you may also be eligible for short-term or long-term disability benefits.
If an insurance company has denied or terminated your claim, a diabetes disability lawyer at Samfiru Tumarkin LLP can review your insurance policy, medical evidence and denial letter.
Contact us for a free consultation if your short-term or long-term disability claim has been denied or cut off.