It’s official. On June 22, 2023, the Canada Disability Benefit Act became law in Canada. This is a historic social benefit on par with the creation of the Canada Pension Plan and Medicare, both introduced in 1965. In this article, I am going to give an overview of what we know about the Canada Disability Benefit (CDB) and what we can infer.
Please note: This article was published on August 29, 2023. We since updated on April 24, 2024. So, the information in this article is consistent with what was made available about the CDB at that time. We will continue to update this article as we learn more.
What is the Canada Disability Benefit?
The Canada Disability Benefit is a new program designed to lift Canadians with disabilities out of poverty. Backed by an investment of $6.1 billion over six years and an annual budget of $1.4 billion, it provides financial support of up to $2,400 per year to eligible individuals aged 18-64.
This initiative, set to launch in July 2025, mandates possession of a valid Disability Tax Credit certificate for eligibility and includes provisions to cover associated medical form expenses. According to the 2024 Budget, the new benefit is estimated to increase the financial well-being of over 600,000 low-income persons with disabilities.
Who is eligible for the new Canada Disability Benefit?
According to the 2024 Budget, the Canada Disability Benefit will be available to Canadians with a valid Disability Tax Credit (DTC) certificate. So, in order to qualify, you must be approved for the DTC and meet other qualifying criteria related to income and age — aged 18 to 65. This eligibility criterion was decided so the benefit could be delivered “as quickly as possible and to ensure nationwide consistency of eligibility.
What are the eligibility criteria for the DTC? In order to qualify for the DTC, a medical practitioner must certify that you have a severe and prolonged impairment resulting in a marked restriction in one of the categories, significant limitations in two or more categories, or receive therapy to support a vital function. You must also be a Canadian citizen or a permanent resident.
To learn more about the DTC’s eligibility criteria, check out our Online Guide to the Disability Tax Credit.
How much will the new Canada Disability Benefit be?
On April 16, 2024, Deputy Prime Minister and Finance Minister Chrystia Freeland announced the budget for the new Canada Disability Benefit. The government is providing a total investment of $6.1 billion spread over six years, with an additional ongoing allocation of $1.4 billion for operational costs, which is earmarked to deliver a maximum yearly benefit of $2,400 for eligible claimants– which works out to $200 a month and about $6.66 per day.
Disability advocates across Canada voiced their disappointment in the benefit, noting that the monthly allowance wouldn’t even come close to lifting Canadians with disabilities above the poverty line. According to a report released in November 2023 examining the potential expenses associated with the new benefit, the Parliamentary Budget Officer of Canada calculated that it could require up to $14,356 per person annually to bridge the gap between the current social assistance for individuals living with disabilities and the poverty line.
However, according to the 2024 Budget report, this is only the beginning. The budget states that the goal is for the combined amount of federal and provincial or territorial income support for people with disabilities to grow to the level of Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) to fundamentally address the rates of poverty experienced by persons with disabilities.
So, we decided to investigate just how big the difference is between the combined amount of the OAS and GIS payments and the combined amount of the CDB and the provincial and territorial benefits.
Ontario
The following is a breakdown of the OAS and GIS combined totals compared to the Ontario Disability Support Program (ODSP) and the GIS’s totals:
| Income Supports | Payment Amount (Maxiumum amount for a single person) |
|---|---|
| Old Age Security (OAS) | $713.34 (Maximum payment for people who are 65 to 74) |
| Payment Amount (Maximum amount for a single person) | $1,065.47 (Maximum payment for a single person) |
| Ontario Disability Support Program (ODSP) | $1,308.00 |
| Canada Disability Benefit (CDB) | $200.00 |
| OAS & GIS Combined Total | $1,778.81 |
| ODSP & CDB Combined Total | $1,508 |
The graph and table listed above, illustrate there is a $270.81 difference between the OAS and GIS combined amount and the ODSP and CDB combined amount. Indicating there is still much more funding needed to reach the Liberals goal.
Alberta
The following is a breakdown of the OAS and GIS combined totals compared to Assured Income for the Severely Handicapped (AISH) and the GIS totals:
| Income Supports | Payment Amount (Maximum amount for a single person) |
|---|---|
| Old Age Security (OAS) | $713.34 (Maximum payment for people who are 65 to 74) |
| Guaranteed Income Supplement (GIS) | $1,065.47 (Maximum payment for a single person) |
| Assured Income for the Severely Handicapped (AISH) | $1,863 |
| Canada Disability Benefit (CDB) | $200.00 |
| OAS & GIS Combined Total | $1,778.81 |
| AISH & CDB Combined Total | $2,063 |
In Alberta, the provincial disability support program AISH plus the new Canada Disability Benefit allowance surpasses the OAS and GIS combined total by $284.19 per month providing a yearly income of $24,756.
How to apply for the Canada Disability Benefit?
How do you apply for the CDB? The exact appplication process has yet to be released. However, according to the 2024 Budget, eligibility is based on the Disbaility Tax Credit so we can presume that if you get approved for the DTC you may automatically get asked to apply.
Its also important to note the Budget did vow that the gouvernment will cover the cost of the medical forms required to apply for the DTC.
To learn more about how to apply for other disability benefits in Canada, check out our Application Guide for Disability Benefits.
Interaction with other benefits: Can the CDB be clawed back by insurance companies?
Prior to receiving Royal Assent, the Senate tried to amend the CDB Bill so it would prevent insurance companies and other benefit providers from clawing back the benefit. However, that amendment was rejected, and the Bill was passed without any language that prohibits insurance companies and other providers from offsetting the benefit.
So, what does that mean? Put simply, the federal government’s failure to include this amendment could mean that insurance companies and other provincial disability benefit programs will get to reduce people’s disability insurance payments by the amount they get from the CDB, so if you received $500 per month for the CDB. Then, the insurance company or provincial program could reduce your monthly long-term disability payment by $500.
This is unlikely, however, as the new Budget states: “To avoid persons with disabilities facing clawbacks on their provincial and territorial supports, the federal government is calling on provinces and territories to exempt Canada Disability Benefit payments from counting as income in relation to provincial or territorial supports.”
When will the new Canada Disability Benefit begin?
According to the 2024 Budget, released on April 24, 2024, the government plans to issue the first CDB payments by July 2025.
I will be updating this article as we get more information. We will also provide updates on the CDB during our weekly webinar series, The Disability Claim Answers Show.
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