The federal government has proposed a one-time $150 supplemental payment to help recipients of the Canada Disability Benefit (CDB) offset the cost of their disability tax credit certification or re-certification. The measure is expected to cost $115.7 million over four years, with $81 million of it spent in 2026-27, the first year of implementation, according to the 2025 federal budget released Tuesday.
Eligible people with a disability tax credit certificate can receive up to $2,400 a year through the CDB.
The supplemental $150 payment would be retroactive to the CDB’s launch, which began disbursing benefit payments in July. Recipients can expect to receive the supplemental payment before the end of the 2026-27 fiscal year.
The budget also confirmed plans to exempt the CDB from being treated as income under the Income Tax Act.
The measure, first announced in the 2024 fall economic statement, will help “ensure Canada Disability Benefit recipients keep the full value of their benefits, including other federal income tested benefits and programs,” the document said.
Last year, the federal government called on provincial governments not to claw back the CDB.
The disability tax credit is underused due to complexities in the application process, tax filing difficulties and challenges with Canada Revenue Agency (CRA) processes and contact centres, according to the 2024 annual report issued by the tax agency’s disability advisory committee.
Some of these issues lie outside of the CRA’s mandate, so addressing the underusage will require collaboration with Finance Canada to amend the Income Tax Act, the CRA’s 2024 report noted.