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Disabled Children School Fees Medical Credit

How To Apply for School Fees for medical credit from CRA

In my post What are Financial Bloggers Good For, I mentioned the capability of a parent to claim their child’s school fees as a medical expense (if you qualify under the CRA rules). Mark helped me out with that, and he suggested that I outline the steps that I took to get my child’s school fees for medical credit, from the CRA?

As taken from the RC 4064 – Medical and Disability-Related Information 2012 page from the CRA site:

School for persons with an impairment in physical or mental functions – a medical practitioner must certify in writing that the equipment, facilities, or personnel specially provided by that school are required because of the person’s physical or mental impairment.

My Son Many Years Ago (nice rocking plane his sister made)
My Son Many Years Ago (nice rocking plane his sister made)

If you have a disabled child, you may be able to claim their school fees as a medical expense. It is not automatic, you must ask the CRA if you are allowed to claim the school fees for medical credit from the CRA. Remember that the school itself does not necessarily have to be a school for children with disabilities. It must, however, offer a program, staff or equipment for your child’s learning disabilities.

Here are the steps that we took to apply to the CRA for this (yes, we were granted this tax credit, however, I have been asked (twice) for proof of fees, so remember to keep your receipts). I will be linking to the articles I have already written on the topics involved. You can also find them on the RDSP menu item at the top of the web site):

  1. Apply to get the CRA Child Disabililty Benefit for your child, if your child is not identified by the CRA you cannot apply for this tax credit. In our case we had help from CHEO with all the paper work. (Your child will also need a SIN number to make this application).
  2. We found a school that will work with the specific behavioral issues my son has. This school, knew about the Medical Tax Credit and was willing to help us as well. If you find a specific school for your child’s needs, ask if they have had folks apply for the Medical Tax Credit for Education before. They may be able to help you as well.
  3. We had our Occupational Therapist write a letter about the programs at the school and how they will help my son. Our O.T. went to the school to observe the programs (at each school) before she wrote this letter.  This letter alone is not enough for the CRA. You have more work to do (an O.T. is not a sufficient medical practitioner).
  4. Our Doctor wrote a second letter, referring to the letter from the Occupational Therapist and endorsing the school(s) program as being required for my son. This usually costs money to get from your Doctor (in this case my son’s Paediatrician) , however a small price to pay (usually $25). The Blunt Bean Counter helped out a lot here too, he consulted with me, as he had clients who had applied for the tax credit (he gave me a skeleton for the letter to the CRA).
  5. Collect the receipts for the year for your child’s schooling. These must be included as part of the request.
  6. Include duplicates of the original Disability Grant from the CRA.
  7. A third letter needs to be written by you (the parents), as a cover letter outlining:
    • Your child’s specifics (when the disability benefit was granted, their Social Insurance Number, Age, etc.,)
    • The letters you have included and why they are included
    • A request that the medical credit be granted for your child along with the Totals from your receipts
  8. Send a Registered letter with all the documents included (make sure they are signed originals)
  9. You wait. You can check the CRA web site to see what the current status of the request might be.

As with all of the other challenges you have as the parent of a Disabled Child nothing comes easily, but don’t let that deter you.

Follow on: It has been pointed out that your child may not have to be “disabled” (i.e. receive the CRA disability tax credit) to be eligible for claiming school fees for medical credit. You can try to apply for this, even if your child does not receive the disability tax credit. The direct quote I received was:

That is, a child can neither qualify for the DTC nor the CDB and the family can still claim private school tuition as an eligible medical expense.

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RDSP Update with TD

As most of you know,  I have my son’s RDSP with TD, and it has been a learning experience for myself and I suspect for TD as well (we were very early adopters of the program), so I have gone back to TD to find out whether they have fine tuned their system to make it easier for parents of children that have disabilities (or loved ones).

I first asked TD via an e-mail, but I received a response which told me they could not reply to my query and that I should call the TD Waterhouse Customer Service line.

As a reminder currently the way I can put money into a TD Waterhouse RDSP (I believe the only RDSP possible with TD, currently) is:

  1. Place money into my TD Waterhouse “Normal” trading account
    • Usually this is done by transferring money from my TD Chequing account to this account, if I do this, it takes a day or two to “clear”
  2. Call the TD Waterhouse folks on the phone, and ask for the money to be transferred to my son’s RDSP account. This normally does not happen instantaneously either, so another short wait.
  3. If I wish to buy ETFs, Index Funds, Bonds, GICs or whatever, I must then call back once the money has cleared, or tell the rep I am talking to when I make the transfer what I want to do with the funds being transferred in.
  4. When the Grant part from the government arrives (usually within a few months), if I wish to use the money to invest, I must then call back and instruct the TD Waterhouse rep what to do with the money.

No, this is not incredibly painful (i.e. I don’t have to go into the branch, I at least can do it in my house), I would prefer if:

  1. I could set up an “auto-saving” vehicle  that purchases an Index Fund (or something similar) every two weeks (when I get paid), thus making saving automatic.
  2. If I could at least transfer and purchase equities on-line without having to talk to the nice folks at TD Waterhouse (i.e. do this all on-line)

Neither of these options are now available.

Last week I called TD Waterhouse Customer Service line and got a hold of a very polite chap called Rob, who listened to my questions, excused himself to go check with his supervisor and returned to tell me that nothing had changed, the system is still not optimum (in my opinion). I thanked Rob as he was sympathetic and very courteous with me (I think I was polite as well, but I can’t say for sure).

So here I sit, in the same place as I was in January, using a technically cumbersome system to try to set up a life savings program for my disabled son. If anyone else from TD wishes to comment or contact me I am available (you guys have already called me at work, so you know who I am).

Other RDSP Posts to Read:

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RDSP Update: Nice Payback

My parents gave us some money for him, and we decided the best course was to put the money away in his RDSP (Registered Disability Savings Plan), and we were very pleased with the results.

The Circle of Savings in Canada
The Circle of Savings in Canada

For the RDSP the Government’s kick in was about 2.25 times the money we had put into the account (not 2.25 %, but double plus another quarter of what we had deposited). Thanks to our family income being higher than average we did not get to take advantage of the full bursary which could be:

The Government provides matching grants of up to 300%, depending on the amount contributed and the Beneficiary’s Family Income

This is a limited grant, remember also:

The maximum grant is $3,500 each year, with a limit of $70,000 over your lifetime. Grants are paid into the RDSP until the end of the calendar year in which you turn 49 years old.

If you don’t have enough money remember even if you just put a little money in it you might be able to get a Canada Disability Savings Bond where the government will kick $1000 in a year if you qualify (free money!). Read the RDSP web page to see if you qualify.

Is This Reason Enough?

If there is any question whether this might be a good idea for a parent of a child with a disability, this is the reason. Yes the bursary value is capped, and does have a maximum amount pay out, but if you are not taking advantage of this help from the government you really need to rethink your plans. This is money that will help plan for your disabled child’s future, go do it now!

Addendum

Of course you find out every year how much the government will match in your RDSP Statement of Entitlement, which can guide you how much money to put in for the year.

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Tax Tip: Family Caregiver Amount

This year, there is a new Tax Credit for those caring for disabled loved ones, the Family Caregiver Amount. For those of us with disabled children, we need to make sure we claim it.

I spent a lot of Sunday wrestling with what I thought was a “bug” with TurboTax, thinking that it had not given me this credit (which although is a $2000 non-refundable Tax Credit, it becomes a $300 real credit). It turns out that TurboTax’s Forms (not to be confused with the CRA form), wasn’t really showing things correctly.

The Family Caregiver Amount

The Family Caregiver Amount

 

I came to this conclusion after about 2 hours of changing values and not seeing an obvious change, so I decided to walk away from my task (my new methodology so that I don’t obsess over things for a long time (as I normally do) (for those who point out that 2 hours agonizing over a piece of software is a bit obsessive, DUH!)), but first I printed out my return to look it over (later).

After a suitable waiting period (the next day), I looked at the hard copy of my return and sure enough TurboTax had actually claimed the credit however not on line 303, 315 or 305 as I thought it should, it put it on line 367 on Schedule 1 (since the credit is for my son, who is disabled and born after 1995).

Finding this entry allayed my concerns about my return, however, I was a little concerned since TurboTax did not seem to “import from the previous year” that my Son was disabled, and I had to manually go into the TurboTax forms to reset the “Disabled” Flag in the system. If you have a disabled dependent, do a double-check on your return to make sure you have claimed all credits that are available to you.

So my actual purpose of this post was mostly to point out the importance of making sure that you claim the Family Caregiver Amount on your taxes (if you are caring for a disabled loved one).

 

 

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RDSP update and a TD Explanation

This was written in 2013, and I note that with this RDSP Update TD said they would fix my issues with depositing, however, as I have stated, this has not happened.

After my article TD and their RDSP Program, I received a phone call from a 1-800 number at my office (for my real job).  I get a lot of “phone spam” at my office, and normally I don’t answer such calls, however, I did answer. I was shocked to be speaking to someone from the TD/Waterhouse team that wanted to talk to me about my RDSP posts.

My first reaction was fear that TD had unleashed one of their Media Piranha (or worse one of their Great White Shark Lawyers) on me, but no this gentleman was very polite and cordial. My next reaction was, how the heck did you guys sleuth from my On Line Persona of the Big Cajun Man who I really was, but that isn’t that hard.

The gentleman on the phone wanted to chat with me about my post about RDSPs, so I jumped on that and pretty much regurgitated my posts and my concerns about being able to do anything on-line (and I also outlined how painful it had been to set up the account in the first place). I must admit the gentleman was quite patient listening to my diatribe about my woes with the system, but I actually got a very plausible explanation on why I couldn’t do what I want.

Simply put, it is a system flaw, that won’t allow me to trade within the account or transfer money to the account. The flaw has to do with the account naming, and how the system deals with it (from what I understood this is an issue with a few other account types as well). This seems plausible to me, as I have spoken to various TD folks along the way and they have said to me (in confidence) that there is a great need for a streamlining of how all the TD accounts interact with each other. This arises from the TD/Canada Trust merger and also from an aging infrastructure (this is my conjecture, for any TD folks reading along here). So this is a “system bug” that needs to be remedied before I can do what I want (which is to transfer money in easily, and to make trades in the account as well).

When Will it Be Fixed?

That was the good news, the bad news was that this fix is being included with a larger system change and really won’t be available until the end of 2013.  So I will have to wait until early next year before I can do what I want is the message that I got.

NOTE: For now the ONLY way to deal with my son’s RDSP is over the phone, it is not accessible from a TD bank branch either (I was in doing RESP work and asked, and was told, we don’t do that here), so you must use the TD/Waterhouse 24 hour phone folks to do any transactions for your RDSP.

I appreciate the fact that TD reached out to me to explain and possibly placate my rantings, I just wish they could fix this problem.

 

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