Canada Disability Benefit (CDB)
Definition: A new, federally administered income-support program designed to provide direct financial assistance to low-income working-age Canadians with disabilities.
Purpose: Reduce poverty and improve financial security for people with disabilities by supplementing existing federal, provincial, and territorial supports.
Status: The legislation (Bill C-22) creating the benefit became law in June 2023, but the specific payment amounts, eligibility rules, and start date are being finalized through regulations and consultations.
Key Point: It’s a cash benefit paid regularly to eligible individuals.
Disability Tax Credit (DTC)
Definition: A non-refundable tax credit that reduces the amount of income tax a person with a severe and prolonged impairment in physical or mental functions (or their supporting family member) has to pay.
Purpose: Help offset some of the extra costs related to living with a disability by lowering income tax payable.
Status: Must be certified by a medical practitioner on Form T2201, confirming the impairment meets the CRA’s criteria.
Key Point: It reduces taxes owed, but if you don’t owe taxes, you may not benefit unless you can transfer the credit to a supporting relative or qualify for related programs (e.g., RDSP, child disability benefit).