NLR 102/24 - Disability Benefit Regulations under the Income Tax Act, 2000

Short title

1. These regulations may be cited as the Disability Benefit Regulations.

Interpretation

2. (1) In these regulations,

(a) "Act" means the Income Tax Act, 2000;

(b) "adjusted income" has the same meaning assigned to it under section 122.6 of the federal Act;

(c) "cohabiting spouse or common-law partner" has the same meaning assigned to it under section 122.6 of the federal Act;

(d) "disability benefit" means the overpayment of tax referred to in subsection 3(1);

(e) "DTC-eligible individual" has the same meaning assigned to it under section 146.4 of the federal Act;

(f) "eligible individual" means an individual who

(i) is at least 18 years of age and not more than 65 years of age,

(ii) is a DTC-eligible individual,

(iii) is a resident of the province, and

(iv) has filed a return of income under the Act for the immediately preceding taxation year that ended before the beginning of the payment period for a month in which the disability benefit is to be paid;

(g) "payment period" means the period beginning on July 1 of a calendar year and ending on June 30 of the following calendar year; and

(h) "return of income" means

(i) in respect of an individual who is resident in the province at the end of the taxation year, the individual's return of income, other than a return of income under subsection 70(2) or 104(23) of the federal Act, paragraph 128(2)(e) of the federal Act or subsection 150(4) of the federal Act, that is required to be filed for the taxation year or that would be required to be filed if the individual had tax payable under that Act for the taxation year, and

(ii) in any other case, a prescribed form containing prescribed information that is filed for the taxation year with the Minister of National Revenue.

(2) For the purposes of paragraph (1)(b),

(a) an individual who was not the cohabiting spouse or common-law partner of the eligible individual on the last day of the month preceding the month in which the disability benefit is to be paid is deemed not to have been the eligible individual's cohabiting spouse or common-law partner at the end of the taxation year; and

(b) an individual who was the eligible individual's cohabiting spouse or common-law partner on the last day of the month preceding the month in which the disability benefit is to be paid is deemed to have been the eligible individual's cohabiting spouse or common-law partner at the end of the taxation year.

(3) Notwithstanding paragraph (1)(f), an individual is not an eligible individual in relation to a month in a payment period in which the disability benefit is to be paid where that individual

(a) died before the month in which the disability benefit is to be paid;

(b) is at the beginning of the month in which the disability benefit is to be paid a person described in paragraph 149(1)(a) or (b) of the federal Act; or

(c) is confined to a prison or similar institution for a period of at least 90 days that includes the first day of the month in which the disability benefit is to be paid.

102/24 s2

Overpayment and refund

3. (1) An individual shall be considered to have made an overpayment of tax for any month in a payment period for which the individual is an eligible individual.

(2) The amount of the overpayment referred to in subsection (1) shall be determined by the following formula:

($4,800 – disability benefit reduction) ÷ 12

where the disability benefit reduction is the reduction based on income, calculated in accordance with whichever of subsections (5) or (6) applies to the eligible individual on the last day of the month that precedes the month in which the disability benefit is to be paid.

(3) The minister shall refund the amount of the overpayment referred to in subsection (2) to the eligible individual monthly.

(4) Notwithstanding subsection (3), where the monthly amount of the overpayment is less than $10, the minister shall pay the annual amount of the overpayment to the eligible individual in the first month of the payment period.

(5) Where an eligible individual does not have a cohabiting spouse or common-law partner or has a cohabiting spouse or common-law partner who is not a DTC-eligible individual, the reduction based on income is the greater of zero and the amount determined by the following formula:

36.92% × (adjusted income - $29,402)

where adjusted income is the eligible individual’s adjusted income for the immediately preceding taxation year that ended before the beginning of the payment period.

(6) Where the eligible individual has a cohabiting spouse or common law partner who is also a DTC-eligible individual, the reduction based on income is the greater of zero and the amount determined by the following formula:

18.46% × (adjusted income - $29,402)

where adjusted income is the eligible individual's adjusted income for the immediately preceding taxation year that ended before the beginning of the payment period.

102/24 s3

Application of subsection 38(6) of Act

4. Subsection 38(6) of the Act shall apply to an amount considered to be an overpayment of tax under these regulations.

102/24 s4

Commencement

5. These regulations come into force on July 1, 2025.

102/24 s5

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