Stories in the Toronto Star and CBC imply the DTC is a $5.9 billion cash cow for the disabled – what a whopper that is

Disability Tax Credit is only worth $1,000 and less than 40% of taxpayers who qualify get it (illustration Stephen Pate)

The Toronto Star and on CBC Investigative Reports misled the public into believing the cost of the Tax Credit is spiraling out of control at $5.9 billion annually.

The truth that the DTC costs taxpayers $415 million, 7% of the CBC report.

Neither The Star or CBC would correct their stories.

Less than 40% of Canadians with disabilities who qualify are able to get past the gate keepers at the Canada Revenue Agency.

See –  Dispelling the myths about controversial Disability Tax Credit 

The CBC and Star purport to be running an exposé of National Benefit Authority, a company which helps the disabled get their deductions.

Both stories are full of whopping distortions. We emailed the reporters with the facts but they did not correct their stories.

The Star and CBC are helping Canada Revenue Agency to perpetuate decades of abuse towards Canadians with disabilities.

Is $415 million the same as $5.9 billion?

In the age of tax scams with Swiss banks for the rich and former Prime Minister Mulroney, the media come down hard on the DTC.

The Department of Finance reported the DTC cost taxpayers $415 million in 2009, down from $430 million in 2008.

“CRA statistics indicate that from 2005 to 2008, total DTC claims for disabled taxpayers or their caregivers jumped to 652,630 from 506,440,” reported CBC. “Over this same period, the amount of money credited or refunded under DTC soared to $5.9 billion from $3.5 billion, according to CRA.” CBC (emphasis added)

“The total number of Canadians who claimed disability amounts rose from 480,000 in 2000 to 650,000 in 2008,” reported The Star “In that same period, the total amount claimed rose from $2.13 billion to $4.88 billion.”

Wow! Let’s round up those wheelchair-bound crooks and put them in the slammer.

The CBC and The Star got it wrong because they both repeated a press release from Canada Revenue. Both quote wildly inaccurate numbers and failed to do their research. Sloppy reporting and corruption are the reasons why the public put journalists in the same trust bracket as politicians and used care salespeople (Pew Research).

Notice the similar the wording except for those “jumped” and “soared” verbs. CBC even claims the money was “credited or refunded.”

The real cost to Canadian taxpayers of this deduction is actually going down. Why the hyperbole of “soaring” and “jumped”?

The further back you look, the worse the reporting gets. In 2004, the tax cost was $390 million.  Where are the media getting this mis-information?

(To prove it to yourself, click on the link and search the page for “disability” -it’s the 8th line in Table 1). We got this data from the Caledon Institute and were able to verify it ourselves.

Tax credits are only worth 15 cents on the dollar

The mistake The Star and CBC both made was to equate the non-refundable tax credit of $7,196 with the actual cost which is 15% of the credit. The full calculation is explained by Caledon.

After reading both stories, I sent this information to the CBC and The Star.

CBC didn’t even bother to reply, which is the normal arrogance of our $1 billion, taxpayer subsidized, national broadcaster. Why let facts get in the way of a juicy story?

The Star did send me three replies, insisting the story was not wrong. Figures can lie and liars can figure. Reporters regularly twist the truth to get eyeballs on a page and this story is one of them. It panders to the myth that people with disabilities are shirkers, lay-abouts and welfare cheats.

“I reported on the amount claimed (this does not mean refunded – the CRA stats do not distinguish how much of those credits are refunded retroactively and how much are used to reduce taxable income),” wrote Star reporter Chloe Fedio.

“I also reported on the number of people (both caregivers and individuals who quality) who claimed the DTC. Being eligible and actually claiming are two different things. Those numbers came directly from the CRA. I’m not sure why they would have sent me incomplete figures. I will follow up with my contact there.

“I did not mean to suggest that the $4.88 billion is coming out of taxpayers’ pockets. I simply meant to demonstrate the increase in claims over the past 8 years – something the CRA suggested in their audit of the Ptach Society was related to the disability tax service industry.”

Fedio’s explanation is wrong on both counts – the amount is not billions and it’s not going up over the past 8 years.

The Star was relying on the Canada Revenue Agency press release data which was wrong. When we asked her to correct the impression $4.88 billion claimed meant $4.88 billion, Fedio replied “You are reporting on me reporting?”

We had no intention of reporting on The Star. We hoped they would correct the story themselves. It’s the old arrogance of the media “we stand by the story” even then they story is wrong.

Why have the Ontario media joined the tax man in their decades long battle against the blind, mentally disabled and people in wheelchairs?

Both stories are riddled with inaccuracies, misleading statements and outright lies.

Toronto Star – Disability group a company not a charity

A Toronto charity originally set up to help Jewish children overcome learning barriers was really a business taking a hefty cut from disability support payments, a federal audit shows.

The taxman revoked the charitable status of the Canadian Ptach Society last year for “abusing” the federal disability support program.

Auditors ruled the charity was cooking up applications for people who do not meet the program’s criteria and then issuing bogus charitable receipts for commission fees. The charity used the Canada Revenue Agency logo to advertise tax refunds as high as $30,000.

Today, the people who run the charity are behind the National Benefit Authority, a Toronto company facing criticism for exploiting the disabled by taking as much as 30 per cent of the tax refund.

NBA is one of a dozen companies aggressively marketing a service the government says is unnecessary: they apply on behalf of families of the disabled who want a retroactive refund on income tax paid over the past ten years.

“Every single Canadian who may be eligible for that money should be able to apply for it,” said Akiva Medjuck, president of the NBA company and past president of the defunct charity.

NBA’s slick website opens with a video from Medjuck, 31, who says that “helping disabled Canadians is our passion” and “millions” of Canadians are entitled to refunds due to disability.

The website lists refunds awarded for migraines ($25,436), irritable bowel syndrome ($22,905), global development delay ($13,736), and chronic vertigo ($47,800).

A year ago, the Canada Revenue Agency revoked the status of the charity. As a business, it can continue operation but cannot issue charitable tax receipts.

Auditors said the charity undermined the “integrity” of the disability tax credit by “endeavouring to make peoples’ illnesses fit the criteria for the tax credit.”

The charity’s 1990 application for charitable status listed plans to “disseminate information about learning disabilities, particularly among parents and educators of Jewish children.”

The charity was dormant for many years until 2007 when it began soliciting the public to apply for tax rebates, the audit states. At the start, the charity asked for a fee equal to 15 per cent of the refund. Auditors looked at the charity’s books for 2006 and 2007.

In 2007, the charity took in about $60,000 in fees for making applications, then issued charitable receipts to the clients. The taxman said that is against charity rules because those fees were not charitable gifts.

Auditors also found record keeping at the charity poor, with many missing documents.

In July 2008, the charity threatened to take a client to court for not paying the full “donation” amount. The client paid the charity more than $2,000 but was taken to court for an additional $910.

In an attempt to stave off revocation, charity founder Medjuck said applying for disability tax credits is a charitable activity. The taxman disagreed and revoked the status in January 2010.

“When people began coming to the organization asking for help the organization had to find a way to be able to fund itself,” Medjuck told the Star. “The charity was operating out of its mandate and as soon as that information was brought to the organization, it ceased to operate. That happened in mid-November 2008.”

Medjuck said his company does important work because many Canadians are unaware they might be eligible. It now takes a 30 per cent commission and advertises it can help clients secure refunds of up to $35,000.

A handful of Toronto social agencies have voiced concerns that the company profits from those who could fill out the forms themselves for free, or receive financial services at a much reduced rate. H&R Block offers the same service for $27 for each year reviewed.

In 2010, Better Business Bureau received eight complaints against the National Benefit Authority while the Ontario Ministry of Consumer Services received five complaints.

Meanwhile, auditors suggested that the charity’s “aggressive marketing” is responsible for an increase in retroactive disability tax credits claims in Ontario that date back to 1998.

The total number of Canadians who claimed disability amounts rose from 480,000 in 2000 to 650,000 in 2008. In that same period, the total amount claimed rose from $2.13 billion to $4.88 billion.

There are more than a dozen companies from British Columbia to Nova Scotia that offer tax services to disabled Canadians for a commission.

A tax deduction for blind Canadians was first introduced in 1944, and over the decades eligibility for the deduction was expanded to include more disabilities. The deduction was converted into a disability tax credit in 1988.

Chloe Fedio can be reached at cfedio@thestar.ca or 647-919-5485