(From the September 2025 Edition of eFORUM)

By Jamie Golombek and Debbie Pearl-Weinberg

The new Canada Disability Benefit (CDB) is now available to provide tax-free monthly support for qualifying clients or their family members with disabilities. 

To qualify for the CDB, applicants must be between 18 and 64 years old and have been approved for the disability tax credit (DTC) by the Canada Revenue Agency (CRA). They, and their spouse or common-law partner (if applicable), must have filed their 2024 federal income tax return(s), and must be Canadian residents for tax purposes, among other criteria. Individuals who have been approved for the DTC and who meet most of the eligibility criteria will likely have already received a letter that includes a unique application code and instructions on how to apply. Others can apply, but will need to provide their mailing address and net income from line 23600 of their 2024 notice of assessment. Clients with family members under 18 can file an application for the CDB as early as age 17 and a half, but the CRA won’t process the application until the individual’s 18th birthday. Applications for the CDB can be submitted on the web via the application portal, by phone, or in person at a Service Canada centre.

CDB payments will start the month after the application is received and approved. The first month of eligibility was June 2025, and the first payments began in July for applications received and approved by June 30. But clients shouldn’t panic if they didn’t apply right away. Back payments can be received for past eligible months — though only for up to 24 months from when the government receives the application (and only for months from June 2025 onwards).

Benefit amounts for the July 2025 to June 2026 benefits period are calculated using adjusted family net income for the 2024 tax year. The maximum amount paid from July 2025 to June 2026 is $2,400 ($200 per month). This amount will be adjusted upwards annually to reflect changes in the cost of living.

Because the CDB is an income-tested benefit, the benefit amount decreases once adjusted family net income reaches a certain threshold. This adjusted family net income is effectively equal to the combined family net income as reported on line 23600 of both the applicant’s and their spouse’s or common-law partner’s returns. If adjusted family net income is considerably above the threshold, the benefit amount could be zero. How exactly income affects the benefit amount is complicated and depends on three factors: marital status, whether the applicant and/or their spouse or common-law partner have income from employment or self-employment, and whether the applicant and their spouse or common-law partner are both receiving the CDB.

A certain amount of income from employment or self-employment — called the working income exemption — is excluded when calculating the benefit amount. For applicants who are single, up to $10,000 of working income will be exempt, and for those married or living common-law, up to $14,000 of combined working income will be exempt.

You can help clients find out how much they could get from the CDB using a government-provided online estimator. To get an accurate estimate, input exact numbers from the applicant’s and their spouse’s or common-law partner’s 2024 notices of assessment.

Finally, keep in mind that the DTC not only entitles your clients to the new CDB, but it’s also the gateway credit to being entitled to open up a Registered Disability Savings Plan (RDSP), with its potential for $70,000 in Canada Disability Savings Grants and $20,000 in Canada Disability Savings Bonds.

Jamie Golombek, FCPA, FCA, CPA (IL), CFP, CLU, TEP, is managing director, tax and estate planning, with CIBC Private Wealth in Toronto. He can be reached at jamie.golombek@cibc.com.

Debbie Pearl-Weinberg, LL.B., is executive director, tax and estate planning, with CIBC Private Wealth in Toronto. She can be reached at debbie.pearl-weinberg@cibc.com.