A private psychological assessment is an investment in the future. Because private psychological services are not covered by provincial health plans like OHIP, navigating the out-of-pocket costs can feel daunting. However, several distinct avenues exist to offset, deduct, or subsidize these fees.
The following strategies outline how to leverage extended health insurance, tax benefits, and government funding to finance an evaluation.
1. Leveraging Extended Health Insurance & Benefits
Most workplace health insurance and extended benefit plans provide partial or full coverage for psychological services.
- Confirm the Designation: Review your policy for line items specifically covering a Psychologist. Unregulated providers are rarely covered, so ensuring the clinician holds the proper provincial registration is essential.
- Check the Limits: Plans vary widely, typically offering between $500 and $5,000+ per calendar year. Some premium plans offer comprehensive coverage or clear standard-fee reimbursements.
- Coordinate Benefits: For a child’s assessment, fees can often be coordinated across both parents’ insurance plans to maximize reimbursement. Additionally, if an assessment spans the end of one insurance year and the start of the next (e.g., intake and testing in December and report in January), you may be able to split the claims across two benefit years.
- Health Spending Accounts (HSAs): If your workplace offers a Health Spending Account or Wellness Account, these funds can generally be directed toward the remaining out-of-pocket balance of the assessment fee.
2. Income Tax Deductions and Credits (CRA)
The Canada Revenue Agency (CRA) recognizes psychological services as a legitimate healthcare expense, providing two major ways to recover costs during tax season:
- The Medical Expense Tax Credit (METC): Any portion of your psychological assessment fee that is not reimbursed by your insurance plan can be claimed as an eligible medical expense on your personal income tax return.
- The Disability Tax Credit (DTC) Timeline: Unless an adult or child already has an established, previously diagnosed disability, applying for the DTC is a step that comes strictly after the assessment is complete, and only if the evaluation results confirm eligibility. For individuals with severe, prolonged cognitive or neurodevelopmental challenges, the final assessment report serves as the essential clinical documentation required for the application. If the CRA approves the application (Form T2201), it provides a substantial non-refundable tax credit that can be claimed retroactively for up to 10 years.
- The Gateway to the RDSP: Securing the DTC automatically clears the path to open a Registered Disability Savings Plan (RDSP), a long-term savings tool where the federal government provides matching grants and bonds. Like the DTC, opening this plan is a step that occurs post-assessment, pending the diagnostic outcomes and confirmed eligibility.
3. Funding for Post-Secondary Students
If you are an adult student or a parent of a youth heading to college or university, financial assistance and grants may be available to offset costs:
- Canada Student Grant for Students with Disabilities: Post-secondary students with a documented permanent or prolonged disability may qualify for non-repayable grant funding to help cover disability-related educational costs, assistive technology, or specialized software.
- Institution-Specific Reimbursement: Grants may be available through individual colleges or universities to assist with assessment costs. If a student requires an updated psychoeducational assessment to access campus accessibility services, the institution’s financial aid or accessibility office may offer reimbursement for a significant portion of the evaluation fee once a qualifying diagnosis is confirmed.
Insurance Checklist: Questions for Your Provider
- Does my plan cover formal psychological or psychoeducational assessments?
- What is my maximum annual coverage amount per person for psychological services?
- When does my benefit year reset?
- Is there a maximum allowable cap per hour or per session?
- Do I need a formal medical referral from a family doctor or psychiatrist before submitting a claim?
- Are there specific details that must appear on the final invoice?
About the Author:
Dr. Amanda McKerracher, CPsych is a Registered Psychologist and the Psychology Assessment Lead at the Toronto Psychology Clinic in Toronto, Ontario.
She offers assessments for children, teens, and adults.
Once you’ve mapped out an idea of how you’ll fund the assessment, the next step is simple. At the Toronto Psychology Clinic, our psychologists are highly experienced with a strong track record of providing comprehensive evaluations.
To move forward, contact the Toronto Psychology Clinic today at 416-551-1759 ext.2 or intake@torontopsychology.com to schedule an intake call and book your assessment.