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New Canada Disability Benefit – Proposed Regulations

Details on the new Canada disability benefit were included in regulations that were released on June 29, 2024. This benefit is intended to provide support to low-income working-age individuals with a disability.

To be eligible for the benefit, the taxpayer would be required to:

Be a resident of Canada (for tax purposes);
Have a valid disability tax credit certificate;
Be between the ages of 18 and 64
Have filed an income tax return for the previous tax year; and
Be a Canadian citizen, permanent resident, protected person, temporary resident (that lived in Canada for the past 18 months) or registered (or entitled to be registered) under the Indian Act.
The maximum benefit for the July 2025 to June 2026 period would be $2,400 ($200 per month), but would be reduced by the following:
20% of income above $23,000 if the beneficiary is single;
20% of income above $32,500 if the beneficiary is married or has a common-law partner; and
10% of income above $32,500 if the beneficiary is married or has a common-law partner and both are eligible.

In addition, the first $10,000 of work income ($14,000 for a couple) would be exempt from this calculation. Work income would have the same definition as that used for the Canada workers benefit, which includes income from sources such as employment and self-employment. The maximum benefit amounts would be increased in future years for inflation (based on the consumer price index).

If an application is denied, the taxpayer would have 180 days to apply for reconsideration. If still unsuccessful, the decision could be appealed to the Social Security Tribunal.

ACTION: If the regulations are finalized as proposed, ensure that eligible individuals apply for this new benefit.

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