 So welcome. It's really a pleasure to see everybody here. I'm Ken Brooks, I'm the Dean at the Schulich School of Law. You haven't had a chance to be a one of these before. This is our mini law series and we hold these about monthly over the course of the year. So if you enjoy tonight, which I'm sure you will, please come back for another one. You're in for a treat tonight. You have Professor Faye Woodman. She was she's been around at school for a while. When I first started, when I first started teaching Faye was one of the giants in the area that I teach in, which is tax law. And so she was kind of a mythical creature for me. This person had been out there doing all the same much in writing and as a student I had done quite a bit of reading of her work. And then and then when I entered the Academy, it was a real pleasure to get a chance to meet her in person. And it's just a joy to get to work with her on this faculty. She's an incredible teacher, well loved by students here. She teaches a whole range of different areas including property, trust and tax, but a little less tax these days. She's a kind of key person in terms of our university's pension work. And she's been a real leader in that capacity system that you may have crossed paths with her there. So she is really a very wonderful, well loved colleague here at the school. I'm sure you will enjoy her tonight as I do. Thank you. Now, thank you very much. Kim is too kind. But it feels good. As Kim indicated, my areas of teaching and expertise lie in the areas of trust, equity, succession, elder law, and peripherally to income taxation. So that's one of the reasons why I'm giving this lecture tonight on financial help for caregivers and tax and trust in other strategies. But I think that I should share with you that there's another personal reason why I'm giving this lecture and I have given a lecture like this to many groups around the city. And it's because of my own personal experience of caregivers, of people in my family, in particular my parents who I looked after for about 10 years. And even though it was in some ways very rewarding, it also was very challenging. I tried to look after my parents from a distance and provide the emotional and physical support that I could for them. And I came to the conclusion, which some of you may have also come to, that in a resource scare system, and given certain societal approaches, that in the care of persons with disability, as far as assistance is concerned, the family is the place of first resort, second resort, and third resort. The family is it to a very large extent, and one member of my family said, gee, after this experience, am I ever glad I have a family? But families and caregivers face serious, serious challenges. The challenge is the ordinary ones, which are not so ordinary, which may be extraordinary, of physical and emotional and care obligations and scheduling, and one that I found that I've spent many years doing of advocacy within the medical system and in the middle of it, frankly, if I talk about myself, I was not very inclined to worry about all the government financial assistance problems and that sort of thing. But in working with some other people in similar situations as my parents, I began to understand that a person with disability and caregiving can impose substantial financial burdens on both the caregivers and the persons with financial difficulties. And that there is a system out there, a system of tax and other programs, of private law and trust, which can assist with these burdens. But the problem is there is a labyrinth of them. They are complex. They are, at the same time, spotty, sketchy. And it's just very difficult to find your way through all these different provisions. And so because of my expertise of a sort and because of my personal experience of caregiving, my attempt in the lecture tonight will be simply to provide you with a roadmap through some of those provisions. A way of looking at the provisions and trying to figure out what you may like or your loved one may need from this very complex and, as I said, not entirely logical system. And that's what I want to do today. Now, I know that some of you will be attending these sessions because you're just interested in the mini-law series and you may not have a particular interest in financial support of persons with disabilities. But I hope when I teach today that not only will I talk about the technical provisions, but from practice becomes policy and from policy becomes politics so that it's not like in this law school, in any law school I should think, that we teach what are called bread and butter courses and at the same time fail to look at the context in which these provisions arise and exist and how they might be made better. So within this description today I will be doing some comments about the good and the bad and the truly ugly in these provisions. And I start here with the important caveat which is that legislation changes. Administrative policies change. Individual circumstances vary and sometimes vary among lay persons in ways that they don't understand have legal implications. So I attempt to provide you with some general ideas. I'll provide the roadmap, but you're going to have to do the navigation. You're going to have to do the application. And I might have stepped on a chord. Do you think I did that? Pardon me? No? There it is. Okay, excuse me. Now I'm trying to give this roadmap. You navigate the roadmap. And there are other sources, especially if you have general ideas that you can go to. You can seek advice directly from Revenue Canada in person or on the websites. And an indication of what today was like for me. My original slide which had this further information got corrupted somehow during the day. I had a telephone number because you can look it up on the web. Community volunteers that are organized by Revenue Canada and you have difficulties and you cannot do or do not want to go to a paid professional. You can contact this community volunteer group which may assist you with some of your questions. These are a number of the topics we're going to deal with today. And one of the things that I really want you to do because we're a small group here is I want you to interrupt me and ask me questions as I go along. If you have some suggestion or some particular problem that's related to the topic I'd be most happy to answer questions as we go along. There will be time for questions at the end too, but sometimes if you have it in your head and you want to answer it, well, want to answer maybe at the immediate time is the time to put your hand up. There's a lot of topics here. And these are really, believe it or not, even though they're fairly complex the most basic of the things that we should look at. The disability tax credit as the gateway to all the other deductions, registered disability savings plan, that much underused plan. RSP rollovers. What do we do with RSPs? It's a huge issue. And then the whole thing of caregiver tax credits, pretty pro forma, a bunch of them that people forget about. Medical expenses, and then the complex interrelationship of attendant care expenses, nursing home expenses, and for your loved one things like group homes and things like training schools, things like certain institutions. These things, the expenses of them may all be deductible as medical expenses. And then when we get in a little higher level of planning we use trust not only to manage funds for our loved ones who can't manage themselves but also we use trust funds in certain middle class situations where our loved one is an adult, has qualified for social assistance. We want to set up and give them a little extra of life but we don't want to do it in a way that would merely substitute our income for social welfare benefits. There may be a way of doing that in Nova Scotia. Well, what are the challenges for the caregivers here? Well, we want to recognize the sacrifices of the caregivers, the financial sacrifices by allowing them to access every deduction and credit and support that they can find. We want to provide the families of persons with disability to recognize their economic sacrifices. And if we can, and it's extremely difficult, is to provide some sort of long-term financial stability for persons with disabilities. And the question inevitably comes is who's going to have control of these finances? And the answer is, well, if your loved one is not able to do that then you should consider things like trust, powers of attorney, adult guardianships. These are all legal mechanisms to deal with loved ones who cannot take care of their financial affairs. And of course, for personal affairs, you might want to consider, the loved one might want to consider and you yourself in your life drawing up a personal care directive for your personal care when you can't make decisions. I'm going to start here with the disability tax credit because the disability tax credit is the gateway credit to further benefits under our system. And we often hear a lot about the disability tax credits, how rich it is and how difficult it is at the same time. The disability tax credit is a tax credit, which means it's a deduction from your taxes. It's calculated on amounts, in this case, 7,766. And sometimes the government, I think in order to kind of feel rich and giving, will say you're getting a deduction of $7,766. Well, really, then they take 15% of it and that's the real value of what you get. So your tax credit is what you can deduct from tax payable. And then when you've brought your tax down to zero and you have no more tax and you have dividend tax or disability tax credit left, then you can transfer what you have left to a loved one. So it advantages the person with disability by reducing their income to zero. It hasn't already been reduced to zero and it advantages their caregivers because the person with disability can transfer the disability tax credit to their caregivers. The disability tax credit also has a supplement for children of under 18. Now, the disability tax credit can be transferred from your spouse, your children, and in certain circumstances, your parents, your grandparents, your siblings, aunts, uncles, nieces and nephews. That's what I call the slew of relatives. But there is conditions for the transfer of the disability tax credit. Say your sibling sister is qualified for the disability tax credit and she wants to transfer it to you. You have to have some connection for the transfer to take place. So the sister has to be dependent on you for one or more of the basic necessities. That is food, clothing, or shelter. And that your support of her has to be consistent and regular. That doesn't mean that you have to supply the majority of the support for your sister. No, indeed you only have to supply one of those three things on a consistent and regular basis. So you could help, for example, your sister by providing on a regular basis clothes for her. But it doesn't require by support. Support is support. It's not wholly support. It is support. And there's been cases, for example, where a person's been able to claim a tax credit when the person with disability was in a hospital and essentially had very few needs and the few needs that the person was providing, cigarettes, you know, candies and that sort of thing was considered to be support. So this idea of support is really quite loose. And you can qualify it reasonably easy. The other thing you have to do to take a disability tax credit transfer is that you would have had to claim, been able to claim a tax credit in respect of that dependent. We're looking at the tax credits. Or you would have claimed the tax credit, but for the fact that you couldn't, for example, take the equivalent to married because you were married or in certain situations, your loved one just made too much income for you to qualify to take the caregiver's tax credit or some of those other tax credits. What's the bottom line here? It's reasonably easy to transfer unused dividend tax credits to other taxpayers within this group of relatives. And that would be a significant assistance to caregivers' expenses. The other thing I want to say is, as I indicated before, that the disability tax credit is a gateway provision for taking advantage of a number of provisions in the income tax system for disabled individuals, including the registered disability savings plan, the disability trust, the attendant care medical expenses. So we're going to look at these as we go along and try to figure out what with a loved one, what kinds of income tax and other arrangements you can make to reduce your tax situation as a caregiver and their tax situation as a person with disability. Now, the first program that I'm going, oh, this is the other thing I forgot to talk about, the criteria for the dividend tax credit? Yeah. Will these be online or will there be some way that we can... They will be online. Thank you. Yeah. Yeah, no, no, I know it's a lot to take in and I'm kind of sliding over some of the detail. The dividend tax credit, there's been a big sort of industry developed about claiming the dividend tax credit. You just can't claim the dividend, I say dividend disability tax credit, you just can't claim it on your tax form. You have to do a special separate process to get a disability tax credit. You have to fill in form T2201, which is a fairly lengthy form. Part A, the person with disabilities fills it in and part B, your doctor fills it in. Now this form, and I've filled in many, is quite simple and it tries to understand through a series of questions whether you fall within the criteria of severe and prolonged disability. Filling in the form is not so difficult for you. What is difficult sometimes is getting a medical personnel who is sympathetic to filling in this form, who has some experience filling in this form and won't frankly just flatly refuse to fill in form or I think the worst I've heard is become a lawyer after graduating from medical school and decide they know what all this means and you don't qualify so I'm not going to even let you try to qualify. So my experience with the thing is that medical personnel are often very difficult to deal with in filling out this disability tax credit. On the other hand, some have experience, some are cooperative and obviously in filling out a form there are ways of filling it out which support your case better than other ways. And the doctors who have had some experience in this tend to do this job somewhat better but basically what you have to prove you're a person with disabilities if you want to claim the disability tax credit is that you have to be markedly restricted in one activity of daily living and that could be speaking, hearing, walking, elimination, feeding, dressing or performing the mental functions necessary for everyday life. Mental functions necessary for everyday life are things like memory, adaptability, setting goals and that sort of thing. In the elder law area of course one of the big things we're looking at is the fact of Alzheimer's on the activities of daily living and particularly the mental functions at some point almost everybody who has Alzheimer's will move from the situation where they don't qualify for the disability tax credit until where they do and at that point that's a significantly significant 1000 plus credit for them every year to assist them in all the extra costs that dementia brings to them and the caregivers. Alternatively it could be significantly restricted in two activities of daily living so a little less restricted and all those things above. You could be visually impaired that's sort of a separate category according to certain criteria set down or you could spend 14 hours a week three times a week to a maximum of 14 or at least 14 hours a week for life sustaining treatment. The one that comes to mind is kidney dialysis for example. If you qualify under these criteria and you expect the disability to last 12 more months or as last at the 12 more months then you must complete this form and give it to Revenue Canada and have your doctor complete it or whoever is appropriately completing it because sometimes it could be a physiotherapist or sometimes it could be a psychologist. Then take the form to Revenue Canada and look at it and they usually write back and forth and ask you questions ask your doctor questions this process takes anywhere from two to nine months but now it looks like more nine months and it's only after you get the OK on this form 2202 that you can then actually claim or your person with disability can claim the disability tax credit and transfer it over to the caregiver if they don't need to use all of it and in that first year of claiming the disability tax credit you can't file electronically. Now the big thing is if you're sitting here and it often is the case with elderly people that when they started out in that long and sometimes sad and difficult journey with dementia initially you would not have thought of them as qualifying for the disability tax credit but then they would go over the line at some point they're over the line but life goes on and we don't run out of time to claim the disability tax credit but if it's somewhere down the line we think yes they should claim it yes they should have claimed it last year in the year before but we just I don't know we're so involved in the decline or trying to help that we didn't think of it you can go back and refile and claim this disability tax credit for the ten previous years and if the disability tax credit was $1,800 a year filing back for ten years is going to get you a pot of money almost $20,000 yeah Hi Meg It's the disabled person who deceased No that's an interesting question I never I don't know have you tried it? No No How long ago would the person be deceased? A year I would certainly try that and I don't know whether because what yeah well the person with disability is not refiling but legal representative I don't know but certainly it's worth checking out because very often I find with elderly people nobody thinks to do it you sit there and you watch them and you say clearly this person is eligible for the disability tax credit just doesn't come to mind and particularly sad and particularly difficult when they're clearly you know dying a few things about disability tax credit especially for the elderly they can claim a disability tax credit when they may have a very high income the disability tax credit is not dependent on anyone's income can the person with the disability work and claim the disability tax credit the answer is theoretically yes but practically no how much income can claim and have as I said any amount if the person with disability qualifies for CPP disability benefits or workers compensation does that person necessarily qualify for the disability tax credit and the answer is no all these different programs have different calculations of what is a disability so you might say hey I'm sad I'll get the disability tax credit because I can claim workman's compensation or I can claim CPP disability benefits and they're different programs with different criteria and they don't necessarily entitle you to claim the disability tax credits and who can verify for the disability tax credit to fill in part B well it could be a medical doctor but depending on the illness now obviously you're not going to get your optometrist to certify that you have a mobility impairment or something occupational therapist psychologist medical doctor audiologist for he they can all certify to these things so assuming that with your loved one you've managed to acquire the designation eligibility of a disability tax credit the disability tax credit as they says opens the door for other things and of course the major centerpiece in recent government policy for tax financial supports for disabled persons is this register disability savings plan now the register disability savings plan for those of you familiar with the RESP registered education kind of works like that sort of vaguely you don't get a deduction contributing to the register disability savings plans but when the money's in the plan it grows tax free there's no tax but when it comes out of the plan generally speaking at least the contributions are not subject to tax but there is some fatal flaws to keep with registered disability savings plans the first thing I should say is that the federal government did a survey recently and it decided or felt that only 40% of the people who qualified for registered disability savings plan actually had one so there's 60% of the people out there that don't have a register retirement register disability savings plan and should have one because as I explained to you in a few minutes it's free government money and free government money is just not to be passed up having said that I like free government money but you know having said that this is really a very flawed provision for disabled people and the reason I say that the person who was behind it because he had a disabled son and promoted this along with plan obviously a group for the disabled was Jim Flanagan the late Jim Flanagan and he took particular pride in interest in the development and introduction of this plan in 2008 in Canada but may I say because I think every little bit helps but may I say most respectfully to Jim that this is a plan of the concerns of a fairly small group of privileged families with disabled kids and it excludes to a large extent the elderly and supports for them it excludes people whose life expectancy is short there are some provisions for that there but generally speaking it isn't a life it doesn't help really people with shorter life expectancies and most importantly this is a plan that in a way excludes our young people because young people need the supports now they are poor now they are looking for means and supports to develop their life to have a whole and fruitful life and they need them now so what's this thing well this is a retirement plan for disabled people it just seems crazy to me of all the things we need I'm not saying we shouldn't use it in my family if I had the particular problem I certainly would use it but it just seems a very odd piece of legislation to help very fairly wealthy families and help these wealthy families not with a present but with setting up retirement funds for the future although it does answer the concern of some families, middle class families which is what am I going to do with Johnny or Margaret or whatever disabled child typically when I pass on this is the frightening and perennial problem that parents of disabled children face that as long as they're alive as long as they're functioning things go along quite well but lo and behold once they leave the scene what's going to happen well this to some extent answers that because they do it does provide a retirement plan for these kids and what can you do well you can contribute and you can't deduct it but you contribute up to $200,000 of the lifetime of the particular individual and you can contribute the $200,000 whenever you want essentially the plan matures at age 59 the expectation is you will start taking amounts out of the plan at age 59 and during that period when the plan is being built up the government will give free bonds to your registered disabled savings plan over the lifetime of the child up to a maximum of $20,000 nobody's offered me $20,000 for anything ever so I mean that's free money and just for you don't have to contribute to your registered disabled savings plan you can just open one up say I don't have the money to contribute but tell the government of Canada to put their $1,000 bond in it every year that's fine so too matching or over matching grants from the government for what you contribute to the plan up to $70,000 can be made over the lifetime of the person with disabilities and again like disability tax credit if you haven't been doing this and your loved one is eligible for the disability tax credit then you must set up a registered disability savings plan because it is the best vehicle for long term savings for the disabled it's huge and you can go 10 years back to pick up the bonds that weren't paid to you or the grants that weren't made so that you won't sort of lose them but the first step in taking advantage of this free money is to open a plan and go to one of the banks and open the plan well there is a few downsides to register disability savings plan I'll tell you the upsides they shelter earnings from tax and they grow exponentially and that eventually whenever amounts are withdrawn from a registered disability savings plan low in bill they don't affect your social assistance so you could have a person in Nova Scotia and you could have with earnings you could have 300,000 dollars in your registered disability savings plan and it wouldn't affect anything of your social assistance you still would get your social assistance and that's something that all government across Canada have done and also when you get older it doesn't qualify you for receipt of old age security guaranteed income supplement or CPP disability so it's kind of, it's odd for me, Linky it's odd that this person who has a registered disability savings plan is so advantage compared to everyone else but they are so the answer to me, to you is if you're in the position set up a registered disability savings plan it is not reasonable not to do that well we look at the bonds that you can get if your family income is 25,000 dollars or less more or less you get a thousand dollars a year if the family income is between 25 and 43 you get a thousand prorated and more than 43 you get no bond well you might think hey well that's not much but the family income is higher than these amounts but family income is well after the child is 18 so once someone's 18 it's their income and a person with disability often regrettably will have very low income even though their family might have a high income and the same with grants the family income is 85,000 or less but you know after age 18 with disabilities just looked at their income alone on the first 500 contributed 3,000 for every one dollar the next 1,002 for every two dollars so in a particular year the family or the person with disability would contribute 1,500 to the plan and get a contributions of 3,500 from the government to make the total contributions to the plan $85,000 in that plan so that's multiplying that's a rate of return which I have never seen ever because you know you get $3 for every one dollar you contribute if the family income is greater than $85,000 then there's much more modest matching by the government of Canada what does all this do well all this does is means in 2015 and we go forward about 15 years or so you can see that just contributing 1,500 into your registered disability savings plan for the person with disability and assuming 5% growth that at the end of that period then you're going to get a total value which is the top line would be something over $165,000 in 15 years that's not bad the nice thing about that is even though you're poor when you're young when you're getting older you're going to be quite comfortable you're going to be comfortable and since that doesn't affect your GIS doesn't affect your social welfare like almost everything else does this is a win-win situation the problem with registered disability savings plan is a problem of taking money out of the plan it's very complex and I was kind of waiting my way through the legislation and so I talked to my friendly bank manager and I said well do you understand this whole back provision and he said no we don't understand any of that in Halifax we send it all to Toronto it's a typical thing anyway so it is complicated to understand basically the thing you should remember is there's maximums you can draw out in any particular year even before 60 that depend to some extent on your life expectancy that you pull out the bonds and grants they're taxable and the problem with pulling out bonds and grants before you're 59 before it's matured is that for every dollar you pay out of the plan you'll have to pay three dollars back of your bonds and grants it's punitive they don't want you to take the money out of the plan when you're young and if you do you're going to have to pay back those nice bonds and grants you got you're supposed to wait until you're 59 but as I said people are poor now people are planning their life now people are seeking and developing the supports for their future life now so that's a pretty harsh provision so you take it out before 59 then you're going to have to pay back the bonds and grants any questions about that before I turn to your RSPs okay a lot of you may have registered retirement savings plans but they are a lot of us have little ones at least and you may or may not know that when you die an awful thing happens which is that all the funds in your RSP or your retirement registered retirement income fund falls in your income as a tax in your last year of life or what CRA calls your terminal year so that's a lot of money in one year falling in one year in taxed ordinary tax rates now you can get around that as again many of you know by leaving the money to your spouse and the spouse will put it into her RSP but another alternative is if you have a person with this disability who's a child in your house you can roll the RRS proceeds into your registered disability savings plans tax free these proceeds they're put in the registered disability savings plan for your kid will not taxed in your terminal year and not be taxed in the kids hands until they're pulled out of the registered disability savings plans and so too if you don't have a registered disability savings plan if you confirm or physically confirm or mentally infirm child you can always roll them over tax free to an annuity for the child or the child's RSP or IF on your desk so there's ways that's a big thing that I always visualize when I'm advising people of tax when they get older that big lump sum of really highly taxed RSP what are they going to do with it to kind of shelter it from tax one way is to give it to your spouse another way if you don't have a spouse or you want to divvy it up is to give it to a child with a disability and you can dissipate and prevent the taxation of that big lump sum I will just change for a few minutes and talk about caregiver tax credits remember the disability tax credit is a credit for the person with disability now you may have some benefit from it by transferring it to a caregiver these credits that I'm going to look at in a few minutes can be taken in addition to the disability tax credit they're credits that accrue not initially to the persons with disabilities but to the caregiver and of course the obvious one is a caregiver tax credit now you can read these later but basically it's for a whole slew of relatives but the big fly in the ointment to some extent or the difficulty may be that a lot of people that you're providing a lot of care for don't live with you in order to claim the caregiver tax credit he or she the person with disability has to have lived with you and the other thing is that almost all these tax credits except the disability tax credit have tested so in this situation if the person with disability in order for you to claim the caregiver tax credit the person with disability has to have a net income of less than depending we don't have to go into this 22,060 in the year that's the net income before division B before you start taking your credits so that once the loved one once the person with disabilities has income over 15,000 net income over 15,000 in the year not reduced by tax credits the caregiver tax credit of the caregiver will be reduced and there will be no caregiver tax credit once the loved ones income net income reaches 22,000 now that caregiver tax credit will see later is gooseed up by the family tax credit this is one I just want to mention very quickly a lot of people don't access this one and in the software I've looked at they've often got it wrong but this is basically for relatives who don't live with you it seems odd to have a caregiver credit for relatives who live with you and relatives who don't live with you the significant difference between the caregiver tax credit and the infirm dependent deduction besides whether you live or don't live with the person and you don't have to live with a caregiver for the caregiver to take this deduction is that the dependent the persons with disabilities net income has to be very low usually not working might be on social welfare of it starts being phased out at 6,670 it's phased out totally at 13,000 but I've known families where they have mentally challenged ill children who are not in welfare and are over 18 and have very little income this might be a provision that you would claim if they don't live with you the family caregiver amount is just an amount that goes up some of these other tax credits and it's a federal government credit the one other that I want to talk about is equivalent to spouse tax credit and there's a couple things I want to say is that usually for kids usually for kids or anyone under 18 but it can be for people over 18 if they're wholly dependent due to physical or mental infirmity or and a lot of people don't realize that is if grandma or a parent lives with you and they don't have to be infirm a lot of people don't remember to take that deduction now in order to take it of course you can't live with your spouse you can't be supported by your spouse and you cannot support your spouse so that's one that's often forgotten because when we get older parents we can't say they're really infirm but they're living with us and we can't take the equivalent to spouse tax credit and looking a little bit at medical expenses turning to another issue medical expenses are in two categories the ones for your immediate nuclear family yourself your spouse and your under 18 children if you have other dependence that big slew that's been on all the cards previously you can claim their medical expenses to calculate the medical expenses you'll have to use their income and calculate the medical expenses for each of them separately and it's probably to your advantage because they'll probably have less net income than you will some medical expenses to think about diapers and disposable briefs driveway access that certainly came to the forefront of my mind when I look at my driveway it's not as accessible for me much less a disabled person and getting your driveway access more accessible so that people with mobility impairments can get in and out that is a deductible medical expense certain kinds of renovation or construction expenses widening doorways lower encounters changing bathrooms all that stuff is a deductible medical expense certain kinds of therapy certain kinds of therapy are deductible as a medical expense in this case only if you qualify for the disability tax credit certain kinds of training and some of the things in the autistic world for training that is deductible in certain circumstances tutoring services supplementary to private education are deductible and I bet you a lot of people don't deduct those the one that I find is that you cannot claim the lifeline and health line services those little buttons and tags older people put so they fall or they're alone they can call quickly for someone those are not deductible expenses and I just mentioned in passing that there are refundable medical expenses supplement for working individuals with low incomes and high medical costs I'd like to go into all of those at the time I also want to turn to another issue and the issue is attendant care attendant care is a huge issue I found in looking at looking after my parents it's expensive it's hard to get good attendant care often and the tax position with respect to attendant care or the government subsidies problematic from time to time if you're going to pay for the attendant care yourself and the attendant care is only part time care the recipient can claim part time attendant care only if they're eligible for a disability tax credit and that means that most part time care can't be claimed as the expense for tax purposes and most people get part time care if they have to have full time care they have to be eligible for the dividend tax credit although occasionally a medical doctor will certify that they need it even though they don't have a disability tax credit eligibility and there's this complex relationship you wonder in an area where people are just trying to survive trying to work to deal with their family and support the family the best they can that it gets so complicated you can claim either all your attendant expenses and no disability tax credit or up to $10,000 of your attendant care expenses $20,000 in the year of death and your disability tax credit so to determine what is the better way of doing it you simply have to do the math nursing home fees a huge one when I talk about a nursing home I should say that I'm not talking about any particular defined institution most public nursing homes which you have as you know to pay for anyway most public nursing homes probably are nursing homes that are eligible for the deduction of nursing home fees nursing homes are defined in the income tax act as some place where an individual gets full time care and maintenance and that's mostly public institutions it is not generally speaking assisted living although it's special cases it may be mostly it's just the very seriously ill and disabled people who go into public nursing homes and of course there's costs for that too but in certain circumstances depending on the circumstances you may qualify if you go into assisted living to deduct your assisted living expenses but I don't not often is what I'm saying and there is if you deduct all your nursing home fees you cannot deduct either a tenant care fees or the disability tax credit now if you want to know what are the nursing fees this is really quite good your nursing fees that you can deduct as medical expenses include food, accommodation nursing care, administration, maintenance social program and activities that qualify as medical expenses in some nursing homes they have hairdressers and some little amenities and those are not considered to be deductible but most things in a nursing home would be a deductible medical expense but if you think you're going to live at the Berkeley that's not going to be deductible unless you're in one of the more ill they have some ill floors you will not be able to deduct your nursing home fees now if you can have a choice I don't know if I put it you can have it a choice and it's whether you want to deduct all your nursing home fees and then some of your attendance whether you don't want to deduct all your nursing home fees but you want to deduct a tenant care fees you can deduct a tenant care fees up to $10,000 and your disability tax credit and depending how it works out it might be better to do one or the other and that's what's so disheartening because you really almost have to get an accountant to figure out the ins and outs of the relationship between the nursing homes the disability tax credit and the attendant fees now nursing homes will give you a breakdown so you say maybe it's better that I deduct only $10,000 of a tenant fees and the disability tax credit maybe that would give me a better result than deducting all my nursing home fees and you can figure that out by you go to the nursing home they're used to doing it they'll break this down and they'll say if you're claiming just a tenant care fees in the nursing home these are the percentage of your nursing home fees that are tenant care things and the rest isn't so they break down that they commonly will break this down for income tax purposes the final topic I'll have you break off and have some time if you're interested some questions is I want to talk about trust for a little bit because trusts are really where we kind of move out of what we can do for ourselves and really look on getting more professional approaches and professional help in establishing situations to assist our loved ones first because they may not be able to manage property but secondly because being often in a middle class family there is room for giving a disabled child or person in the family some extras but not everything and it's that middle class family who's going to want to explore the use of the trust so that when they're gone when they're not around that the loved one will be able to enjoy some few extras in life there's three kinds of trusts that we should talk about here and they're called disability trust this is a new kind of trust maybe even some of your lawyers probably haven't heard about it but these are a new kind of trust disability trust which were introduced by the federal government just a few months ago and we're still kind of trying to figure out how to use them but we've got some ideas and these are statutory trusts and statutory trusts are trusts that most provincial welfare schemes across Canada permit parents of children with disability or relatives to set up for a person with disability to give them some long term security and from which the person with disability can draw amounts without disrupting the flow of the social welfare benefits and I'll say first that sadly I was working in this area many years ago and I thought I had convinced the authorities at least some subset of authorities that statutory trusts were a good thing that we should let every disabled individual who's on social assistance let his or her family or the disabled person set up a trust that would not impinge on their ability to draw on social welfare and that's what I thought that we're going to do and they have never done it and indeed the position of the Nova Scotia social welfare authorities seems to be somewhat hardening in respect of how they view trust to disrupt for disabled individuals and the final kind of trust I'm going to talk about is the Henson Trust and how I think it can be used in Nova Scotia to accomplish some of our goals and not to disrupt the ability to have social welfare benefits so I'm going to look at each of these trusts and show you how we use them to do what we want to do first before I go into something which is this new trust the finance minister introduced in the last budget I should remind you about how social welfare works not only in Nova Scotia but in most provinces and what it does is it says you can only have so many assets and if you have more than those assets you won't qualify for social welfare and there are some exemptions I know and everything but in Nova Scotia the assets you can have are a thousand dollars and the other thing is it says if you get any income if you get any income at all it's unearned income you can earn a little income in Nova Scotia but if you get unearned income gifts amounts like that theoretically theoretically even if your family gave you gifts then your social welfare benefits are going to be reduced so what the disability trust attempts to do and what the registered disability savings plan attempts to do and what the Henson trust to do is to preserve social welfare benefits knowing that in order to replace social welfare benefits would require a chunk of money that most middle class families don't have so in the last budget the government of Canada brought in something called the disability trust because because it did something terrible to the law of trust it changed the rate of taxation the trust set up on a person's death under will and it made that rate of taxation very high and people working with people with disabilities said hey that's not fair one of the ways we provide for a loved one on death is to use these called testamentary trust so they made the disability trust different first of all to get the advantage of a disability trust the person with disabilities must qualify for the disability tax credit but once it becomes a disability tax credit the accumulating income in the trust that just stays in the trust it's not paid out to the beneficiary that's taxed at very low rates that you no longer can access anymore so that's a really big benefit payments can be made only to beneficiaries with disabilities under this disability trust and there can be other non-disability benefits but they should not receive amounts from the trust while there are beneficiaries with disabilities the whole point of this is that you can put money in the trust for your loved one called a disability tax trust and get preferential rates while the income is accumulating in the disability trust it is hoped that all the provincial social welfare systems will amend their provisions so that amounts paid out of the disability trust will not reduce the social welfare assistance that has not been completed as yet but that's the hope it's kind of it's kind of like a registered disability savings plan but it's not so complicated it doesn't have the bonds it's a discretionary trust it is a much more flexible thing than the registered disability savings plan which is for retirement so that's one thought nobody really knows yet quite how they're being used because the legislation isn't complete I said there's no statutory trust in Nova Scotia but if your loved one lives in another place like Ontario you're allowed to set up $100,000 trust for your loved one and it won't affect the social assistance in Nova Scotia it appears at this point the only way we can set up a trust for our loved ones is by the use of something called a henshin trust now a henshin trust is a particular kind of trust and the terms of the trust say say I had a disabled daughter all the income of this trust is to be accumulated and the trustees and their sole discretion shall pay out the income to my disabled daughter Judith now by the terms of the trust a couple things are accomplished the big problem with setting a trust with money if it's not a statutory trust is that the trust being worth a lot of money having a lot of funds in it will take away your eligibility to claim social assistance because you'll have this big chunk of money as an asset you won't claim for social assistance so that's why we make a henshin trust a discretionary trust and a discretionary trust and a piece of paper just says I name a beneficiary my beneficiary is Joe Blocks good friend of mine he's gonna be the trustee of this trust and he can pay out amounts of that trust to my daughter Judith in his sole discretion so she may not get a cent from that trust and she has no way of forcing that trustee to pay an amount out because I've said in the trust indenture in his sole discretion therefore since she has a whole speculation of getting out of a discretionary trust she doesn't fail the asset test because a discretionary trust as an asset is worth nothing now when amounts come out of a discretionary trust they are under an income and could reduce your financial assistance on the basis of unearned income in the month you receive the income out of the discretionary trust but there's ways of getting around that in Nova Scotia they have told me and I truly believe and they do change their administrative policies from time to time that if the money comes out of the trust for sort of informally improved purposes maybe they won't take that money away from the person with disability by essentially immediately reducing their social welfare so that goes out for medical supports and things that they think that the child needs or the person needs then they won't reduce in Nova Scotia social assistance and other provinces have very explicit rules about what coming out of a hands in trust will reduce social assistance and will not reduce social assistance but the nice thing about it is since it's not an asset you could have a big of income come out of a hands in trust for one month and lose your social assistance for one month but if it was used for approved purposes then the next month your social assistance might be restored in Nova Scotia. Now I talk to the authorities and I know people are using hands in trust and they make a lot of sense in law but they have a provision in the Nova Scotia regulations that says all amounts in a trust will reduce your social assistance as long as it's feasible for the person with disability to get hold of that money and I said to the powers to be well a discretionary trust a beneficiary has no rights against the trustee it's not feasible and therefore hands in trust shouldn't reduce your social assistance at least until it's money's paid out from it and I got sort of silence so they're not too pleased and I've had arguments with parents from time to time I don't want to set up a scheme where sooner or later some person's going to change the legislation but that's all we've got now that's all we have in Nova Scotia Nova Scotia doesn't have the provisions of BC Nova Scotia doesn't have the provisions of material that recognize very specifically the particular problems of persons with disabilities in the particular financial challenges well I went on not too long until 10 after 8 and there's lots to talk in this area I don't know if there's any questions that people have or any particular situations they could yeah that's the first one that you started it said visual impairment do you know anything about my father's and he said he's not blind but he's definitely visually impaired yeah there's actual you'll know quickly it's in the provisions of the regulations so you can call up Revenue Canada it's very precise they have vision of yeah that's right it's just very straightforward so you're describing something that's very obvious that people would lose a vision as they get older and not think to apply for the disability tax credit I'm sure like a lot of older people will retire for a year your father would appreciate an extra $1800 a year yeah yeah we've been buying things for him that are necessarily medical but are ways to improve the quality of life as a visually impaired person so would they be yes it will depend what they are there's a huge long list it's found on the web of things that are eligible for medical expenses they can't just be good or necessary they have to be on this list and so you'd have to look down the list it would be surprised it's a very long list yeah yes so medical expenses you've talked about therapy as being something you can claim would that be provided by the government or if you were to hire a private person if you were to hire a private person the cost of hiring that private person especially in the autistic world where it's very expensive can be a medical expense yes it's something to think about for whatever reason yeah questions so similar to the question on visual is there an objective criteria for intervention that's a really really difficult one because you know I work frankly with a lot of elderly people and the other people I work with are a lot of young people with mental severe major mental illness the disability tax credit is very problematic in the area of mental ability with my young people it's hugely problematic because it says that you have to have a severe and prolonged disability which not only means for 12 months or going to be 12 months but 90% of the time and if you have dealt with people with bipolar need the ups and downs of schizophrenia or some kinds of addiction they are very very ill persons but in many cases you can't say 90% of the time they're ill because it's the nature of mental illness it's the instability of mental illness and that some people have been rejected because you're bipolar, you're manic and then you're terribly but somewhere in the middle you're okay and therefore you're not 90% so it's really in answer your question having dealt with these individuals and being frustrated by the system I find that elderly people although they they do have good days and bad days there is a line they pass with dementia where the memory is very poor and I don't mean poor in the sense of they can't remember who you are and doing everyday things and taking change do their banking do grocery shopping so that sort of thing is and where they can't be they can't remember to turn off the fire they can't plan they can't set goals they can't really adapt they become very rigid this is all part of and it's just where on that line you think the person because not all people obviously with Alzheimer's are eligible for the disability tax credit but I think a lot of people do miss the disability tax credit because of the mom or dad or themselves I don't know go along that line at some point to pass it and see it's in that respect that it's nice to have a contact with a sympathetic family doctor this frustration is doctors either think they know when they should give a disability tax and they don't know the law it's a legal question not a medical question they haven't got experience they answer the questions in a way that disentitles I'm not saying anyone should lie but there are ways of answering questions and they answer the questions a long way so it's always worthwhile looking around for a doctor but what do you think about this what's your experience have you ever filled in one of these forms it does tests for them so you would think that part of what they do this would sort of be it yeah I mean that's true but that's for medical well it's for capacity yeah it is but this is when they do these capacity tests what it is under the guardianship the criteria can you manage your business affairs well I know quite normal people can't manage their business affairs that's a very high criteria and then in the personal directives act it says do you have the knowledge and the ability to understand the result of taking a certain decision or the result of not taking a certain decision that way you know a lot of these tests are for particular things ones for capacity when the test for making your will is a very high test a lot of people don't know that the test for making your will is much higher than getting married which I always thought was hilarious so in getting your will and drawing a will you must know the nature of a will you must know generally the nature and extent of your property you must know the natural objects of your boundary a bounty and you mustn't be under any delusions that would distort your testamentary deliberations with the disability tax credit it's in a different kind of world what they're asking is can you carry on the activities of deling living that's kind of different than that other test I gave you isn't it yeah so it's because these other tests fail or pass you know some of these many mental tests reciting back seven and doing that stuff I'm not sure how relevant the whole process has been medicalized and I think we as individuals have to push back a little bit and apply a little common sense so activities of daily living are generally low pass yeah mentally I mean you have to do simple things the description by the way if anyone wants to know a little bit about disability or further disability supports Revenue Canada on the Revenue Canada website if you just type in disability has great little videos about particular issues so now hopefully I've drawn a bit of a road map particular issues that might be of interest to you I just hate it when people don't take deductions and get supports they are entitled to given in my experience how limited the resources are generally any other questions well if I'm I'm Fay Dot Woodman at dow.ca if anyone has any questions or references or whatever they want and this will be on the web and so I've enjoyed having you tonight and have a safe journey home