The federal government denies the Disability Tax Credit to those who need it – and are eligible by law
By John Adams
This story began when I offered to represent the mother of a three-year-old with PKU, a rare genetic disorder, in a federal tax court. She had never even fought a parking ticket before she went against the federal government. We won. It turns out, evidence matters. But the story doesn’t end there.
We went to court because the Canadian Revenue Agency (CRA) refused to meet with the non-profit association I lead, Canadian PKU and Allied Disorders Inc., to discuss the ways the CRA has been systematically denying applicants with this rare genetic condition the Disability Tax Credit.
The Disability Tax Credit is a federal benefit worth $2,000 to $4,000 a year for families affected by qualifying disabilities — and is the gateway to the higher Child Tax Benefit and the Registered Disability Savings Program.
As father of a child with PKU, I know how critical the credit can be for affected families. But with proper supports and treatments, individuals with PKU can thrive. My son is age 30, doing well, is a university graduate, living independently, working as an arborist with the training and goal to be a firefighter.
So what exactly is PKU?
PKU stands for phenylketonuria, a daily, lifelong threat to the brain. Although there are fewer than 2,000 people with PKU in Canada, governments ensure that every baby born across Canada is tested for PKU. Untreated or poorly treated PKU leads to intellectual disabilities and other complications. There is no cure for PKU but there are treatments.
PKU is a rare genetic (inherited) disorder whereby one gene produces a defective enzyme in the human liver. The defective enzyme means a person cannot eat protein without a serious risk of harm — no meat, cheese or milk, no breast milk for a baby, no legumes, nuts or soy, etc. This severe restriction is because the defective enzyme cannot properly process one of the 20 amino acids which make up food protein — in this case, the amino acid called phenylalanine (Phe). High Phe levels are poison to the brain.
The gene mutation and defective enzyme qualify as physical impairments towards Disability Tax Credit eligibility.
The protein restriction in PKU is so severe that it is incompatible with life. However, PKU became treatable in the 1950s when a breakthrough made it possible to make medical formulas with 19, but not the 20th, amino acid. These formulas are synthetic protein without Phe.
Manufacturers developed foods designed to be low in protein or low in Phe. Governments pay for these medical formulas and foods as part of necessary therapy. A person with PKU is prescribed a precise amount of Phe for growth and development affecting every cell in their body. Without that individually calibrated amount of Phe, they will die or be damaged.
So why does the government deny the Disability Tax Credit to many diagnosed with PKU?
It seems, the CRA does not understand the difference between a conventional diet and the complex PKU therapy, which includes frequent specialized blood tests. The Income Tax Act states that “therapy” qualifies for the tax credit, but “diet restrictions” and “diet regimes” do not.
When the CRA lumps PKU therapy into “diet” it is unfair — and legally wrong.
There is good news. A recent decision of the Tax Court of Canada overruled CRA and found as a matter of law that PKU medical therapy is nothing like a conventional diet restriction or regime.
Those with PKU also fulfill the criteria for a Disability Tax Credit for persons who “would be markedly restricted in activities of daily living but for therapy.” These activities include mental activities.
So, problem solved? Not quite.
Unfortunately, the CRA still refuses to meet to discuss its systemic discrimination against many people with PKU – and those on therapy to prevent real harm are still being denied their legal right to a tax credit. CRA has until October 1, 2017 to appeal the judge’s decision.
As the judge commented in his decision, the CRA should “think hard” about improving the wording of the Disability Tax Credit application and the online explanatory guide to better deal with applicants – like those with PKU — who would have marked restrictions in everyday life “but for therapy.”
The CRA also needs to listen to the PKU community, rethink its approach and consider PKU much like it considers diabetes, which typically qualifies for this tax credit. Or we will face CRA in court again.
There are at least five other PKU DTC cases before the courts. I know, because I’m the agent representing them.
John Adams is an expert advisor with EvidenceNetwork.ca, a co-founder and President of the Canadian PKU and Allied Disorders non-profit. A seasoned management consultant, he has worked as a reporter for The Globe and Mail, lead assistant to an Ontario Cabinet Minister and was elected three times to Toronto City Council.