Tripping on a rock in the dark on the way to the hot tub in your backyard, you injure your back and leg. Your friend is suffering with anxiety and depression associated with caring for an aging parent who lives with her.
Which of those scenarios make up more disability claims?
Mental conditions are more than 3 times the number of claims than accidents. Over 30% of disability claims are for that reason. Claims due to accidents are only 8%. The statistics on disability are not what people assume them to be.(1)
So your contingency plan should look something like this:
It is highly advisable to have AT LEAST 1 month’s worth of living expenses as short term savings. In other words do not always spend every penny of your monthly salary.
If you are employed, you hopefully have some type of disability policy. You need to review it to know what benefits you are entitled to, and how to make a claim. We can review it together if you like.
If you do not have a group disability plan you need to ask yourself the question: Is it worth it to spend 1% of my income to insure 100% of it over a period of time? Why roll the dice especially if you are self employed or own your own business? Please speak to me to know what options you have.
The Disability Tax Credit(DTC) is an often overlooked tax credit that can be invaluable if used and applied properly. The DTC will decrease your tax owing if you or a close relative is “markedly restricted’ in one or more of the activities of daily living, ‘for a prolonged period’. Those include dressing, eating, toileting/bathing, walking, speaking, seeing and hearing, and the associated mental functions. A medical professional is required to complete a part of the application.
The DTC is transferable to a close relative in certain circumstances, mostly if you live and/or care for the disabled person. Examples are an aging parent living with a child, a child with a disability whose DTC can be transferred a parent, or in my mother’s case, the credit was transferred to my dad, which helped him pay less tax.
I have made several clients aware of their ability to qualify for this credit. And if someone is less than 49 years old and receives the DTC you can open a Registered Disability Savings Plan(RDSP) which has matching government grants on contributions. Please contact me if you or someone you know needs more information.
Life has a habit of happening in bunches. In 2013 I became unexpectedly and very seriously ill and was hospitalized. They only reason I was let out was if I followed a self administered antibiotic IV program. Then my mother contracted aspiration pneumonia and after a few days passed away. All of this happened in the span of a few weeks. The associated stress from those 2 events could have easily carried on long term, and impacted my ability to earn a living. Please know the stressful road has pit stops and assistance along the way, and that you don’t have to go it alone.
(1) WHO November 2013