CRA imposes 90% rule on PTSD cases

March 2, 2020

“Unfortunately, Post Traumatic Stress Disorder (PTSD) cases have to go to Tax Court,” explained an appeals officer of a recent case regarding an Afghan veteran, “because the impairment is episodic in nature and the way the Income Tax Act is written, they don’t qualify.”

That is not true.

And yet, CRA continues to discriminate against people living with PTSD as well as bipolar disorder and other severe mental illnesses by claiming that they do not “rise to the level of eligibility” because the disabling effects are not present at least 90% of the time.

There is no basis in the law or jurisprudence to interpret the legislation narrowly and technically by imposing a 90% threshold when it is impossible to quantify the disabling effects of a chronic and persistent medical condition on a 24/7 basis.

In a recent Tax Court of Canada case, Amber Green v. The Queen, Justice Siobhan Monaghan recognized the problem of an accurate assessment for the determination of eligibility for the DTC, stating in his ruling allowing the DTC:

"One of the significant challenges with assessing the impact of mental impairments on daily life is that the impairment may be present all of the time, but the symptoms may not be or, if present, may not be visible to those around the individual who suffers from the mental impairments."

It is hardly surprising that the Honourable Carolyn Bennett, a medical doctor, and former Chair of the Subcommittee on the Status of Persons with Disabilities, raised a number of questions during the parliamentary hearings held with the senior staff of the Department of Finance and the Canada Customs and Revenue Agency on February 5, 2002:

“I think the 90% rule was the one we didn't understand. All or substantially all--some people can say that's 51%. Where did the 90% come from?... Who decided on 90%? Where does “all or substantially all” (come from)? Is that from a medical committee?... ‘Substantial’ is not necessarily 90% all the time. ‘Substantial’ is a very subjective view. Yet when you fill in the form… you are rejected because it's not 90%. We just want to know, what's the process for coming to 90%?”

Even the CRA has recognized that an inflexible arbitrary percentage is not always appropriate. At least, that is what is spelled out in its own policy guidelines, distributed to Disability Advisory Committee (DAC) at its inaugural meeting on January 24, 2018:

"While the words “substantially all” cannot be rigidly interpreted as referring to specific percentages, CRA will consider that the test is met if the 90% threshold is reached. This position does not rule out a particular case, depending on the facts and circumstances, a level of something less than 90% could still meet the “substantially all” requirement."

CRA continues to disregard the reality facing health practitioners that it is virtually impossible to quantify the disabling effects of chronic and persistent medical condition on a 24/7 basis where the symptoms are not always perceived to be present. 

Some might suggest that the absolute 90% guideline is illegal if it is not a legally supported absolute measure of disability.   

As long as we do not have a mathematical model to make such a precise determination of disability, the CRA, the  . This has become a critical concern in recent years for our Afghan veterans who suffer from Post Traumatic Stress Syndrome but are having difficulty accessing the DTC because of the stranglehold over the health practitioners’ ability to provide a fair assessment of their patients.

As it stands, the average rejection rate for all DTC applications is approximately 10%. However, the rejection rate for applications in the mental functions category is almost 20%. 

During question period on February 28, 2020, John Williamson, MP New Brunswick Southwest rose in the House of Commons asking the Government (Minister Lebouthillier) when they would act to end this discriminatory practice.

DAC members have asked the CRA to abandon its restrictive policy guidelines and implement recommendation #6 as stated in our first annual report, Enabling access to disability tax measures"That the Canada Revenue Agency no longer interpret all or substantially all as 90% of the time..."

Otherwise, the CRA continues to discriminate against some of the most vulnerable members of our society, relying on the fact that the system is too complicated and expensive for them to fight back. Global News highlights the concerns of individuals who have previously accessed the DTC but are now being denied the tax credit when asked to reapply even though their condition remains largely unchanged. 

A physician or other qualified health professional must certify that a Canadian with a disability is “markedly” restricted in at least one basic activity of daily living all or substantially all of the time, that is at least 90% of the time or that the cumulative effect of restrictions across several activities is equivalent to being markedly restricted on one basic activity of daily living.

In Watts v. The Queen, former Chief Justice of the Tax Court of Canada, Donald G. H. Bowman allowed the DTC because of a number of precedent cases including Lim v. The Queen where he noted the following: “I think it would be absurd to conclude that the appellant's rights under the Income Tax Act should depend on the assignment of an arbitrary percentage to the words ‘all or substantially all.’  This mechanical exercise runs counter to common sense.”