CRA tells Commons committee it suspended action on disability tax credit
The Canada Revenue Agency stopped processing all disability tax credit applications made by diabetics for a short time this past year, a senior CRA official told the Commons finance committee on Thursday.
“We did, for a period of time, stop processing,” Frank Vermaeten, the CRA’s assistant commissioner for the Assessments, Benefits and Services Branch, said in response to questions from Conservative MP Tom Kmiec.
Last year saw $1.3 billion claimed though the DTC and the CRA received roughly 770,000 applications from people suffering from a range of conditions. How many of those were diabetics is not known. Since then, the CRA said the number of applications has gone up by eight per cent.
The federal government has made investments to help CRA cope with the overall increase in applications, but that hasn’t stopped a pubic outcry over soaring wait times for DTC applications by Canadian diabetics.
“Whereas it used to be three or four weeks, now it’s over 40 weeks that most people are being quoted for a response to their application,” Kimberely Hanson of Diabetes Canada told the finance committee in an appearance on Nov. 7.
Also, Hanson said, diabetics are now finding their applications are less likely to succeed. A year ago, 80 per cent of DTC applications coming from type one diabetics were approved.
“Since May 2017, that number has plummeted to less than 20 per cent,” said Hanson.
“I have personally seen 715 cases of disallowance. I have statistics that are coming from groups that treat or support thousands of patients trying to access the disability tax credit.”
Conservative MP Pat Kelly said Thursday that the processing freeze can only have made things worse.
“It would certainly add to their wait times,” said Kelly.
Vermaeten did not say how long the CRA freeze was in place, but Hanson said on Nov. 7 that she believed it lasted at least 13 days and started on Oct. 25. CRA officials told the committee that DTC files are sorted by severity, not by disability, making a solution to the delays hard to arrive at and suggesting that individual files have to be manually reviewed.
Vermaeten told the committee Thursday the freeze was imposed to allow CRA to explore diabetics’ concerns about the drop in approvals.
“When it became a public issue, there was a short period of time where we closely looked at some of the existing files to see whether there was something we were not processing properly,” said Vermaeten. “It takes a little while. There was a temporary hold.”
For diabetics, that freeze could compound their anxiety while awaiting approval.
“We all have constituents who have been rejected who have type one diabetes, and the disability tax credit is extremely important to them,” said Wayne Easter, the Liberal chair of the House finance committee.
“We have people in tears on the phone who cannot understand why at one point in time they were accepted and now they’re not.”
CRA Commissioner Bob Hamilton told the committee Thursday that he had never heard about an individual being forced to wait 40 weeks for a decision on an application. He said that the average wait time is currently about 10 weeks.
However, if applicants wish to claim the credit for previous periods of time when they were eligible for the DTC, Vermaeten acknowledged they could be waiting at least eight weeks longer.
The CRA’s response failed to quell Kelly’s concerns.
“There seems to be a lot of scrambling at the CRA on this issue,” said Kelly.