The federal government has recently posted the regulations on the Canada Disability Benefit (CDB), which takes effect in July 2025. VCC breaks down all the details on eligibility, the application process, and how the benefit will interact with provincial programs.
People with disabilities experience disproportionately high rates of poverty and often face significant barriers to employment. Provincial income supports are inadequate, making the CDB an essential poverty relief measure. The CDB is a cash benefit the federal government provides to working-age Canadians with disabilities. The maximum benefit is $2,400 per year, or $200 per month, significantly below expectations. For more information about the adequacy of Alberta's benefit rates, refer to our policy brief on the Assured Income for the Severely Handicapped (AISH) program.
How is eligibility determined?
Eligibility for the CDB is based on the same criteria as the Disability Tax Credit (DTC). These requirements are defined as having a marked restriction, in need of life-sustaining therapy, or experiencing significant limitations. Applicants must be between 18 and 64 years old, a recipient of the DTC, a Canadian resident for tax purposes, or a Canadian citizen or permanent resident. They must also have filed an income tax return for the previous year.
As mentioned above, the intent of the CDB is to "relieve poverty," to achieve this desired effect, the government wants to ensure the benefit is reaching those living under the Market Basket Measure poverty threshold as much as possible. The CDB income threshold for a single person is $23,000, and the government will use family income to determine eligibility instead of individual income despite the potential negative consequences, such as social isolation, as we indicated in our AISH brief. The government has attempted to compensate for unintended negative consequences by providing generous income thresholds for couples.
Regrettably, current recipients of the DTC will have to apply again for the CDB since the government will not enroll people automatically. Based on a July 25, 2024, information session on the proposed regulations, this was due to "the risks related to potential interactions with other federal, provincial benefits, as well as private insurance benefits that could result in possible clawbacks for clients." It remains to be seen if the government will reconsider automatic enrollment once there is clarity on provincial clawbacks. VCC believes no administrative change is "too complex to overcome," including automatic enrollment. The government has created red tape, and they can reduce it.
As with all targeted benefit programs, assessing eligibility becomes complex when income from employment is considered. Even more so when the provinces are also delivering their own disability benefit programs; the table below shows that although the AISH program has the highest income exemption amount, the CDB has a much more generous exemption rate, enabling a person to earn an income above the poverty line before benefits disappear entirely.
