Ottawa should make it easier for Canadians with disabilities to qualify for the disability tax credit and should reform the rules that govern structuring and marketing RESPs, says the the Canadian Life and Health Insurance Association.

The two recommendations are central to Toronto-based organization’s wish list in advance of next week’s federal budget.

CLHIA is urging the federal government to follow through with recommendations it made to the Finance Minister’s technical advisory committee on tax measures for persons with disabilities. In particular, CLHIA’s submission referred to a recommendation that “the medical adjudication and qualification for the disability benefits should automatically establish eligibility for the disability tax credit.”

“We think it’s a pretty reasonable suggestion to make life easier for people who are disabled,” says Jim Witol, CLHIA’s VP of taxation research. “Revising the disability tax credit is one way of partially doing that.”

CLHIA also says Ottawa should change the rules governing registered education savings plans to keep up with changes in the RESP marketplace. Originally RESP plans pooled investments and benefits for all participants, but that has changed with the development of self-directed RESPs. “The continuing requirement that all RESPs be legally structured as trust is inappropriate for today’s plans that do not pool investments and benefit the family,” CLHIA says.

This restriction is also an impediment to fair competition in offering RESPs, says CLHIA. “It results in life insurers, credit unions and other institutions being unable to offer such products without the involvement of a third-party trustee, a significant requirement that adds significant costs to consumers with no perceivable benefit.” This requirement does not apply to similar plans, such as RRSPs or RRIFs, says CLHIA.

Finally, CLHIA is joining with other financial industry players in requesting that the “large corporations tax” on financial institutions be eliminated, as was recommended by the House of Commons finance committee in 2003.