Juggling high prices and high debt? You’re not alone when it comes to both sentiment and support. Fortunately, this year there are two new pieces of federal legislation—one new program and two benefit top-ups—that put extra money in the wallets of individuals and families. As these new financial support measures depend on a family net income, how you file your annual tax return is more important than ever.
Here’s a breakdown of what these tax breaks will entail. Understanding whether your family or your work family qualify for these new benefits will help you to be proactive in your financial management approach.
A Doubling of the Goods and Services Tax (GST) Credit
Canadians who filed a 2021 tax return and were eligible for the GST Credit will receive a one-time payment before the end of the year. The GST Credit doubles the amount normally received in six months (i.e. two quarterly payments), meaning that for the 2022-23 benefit year, you could earn a maximum of:
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- $467 for singles without children—this is an extra payment of $233.50
- $612 for married or common-law partners or single parents—this is an extra payment of $306
- $161 for each child under 19 years of age—this is an extra payment of $80.50
If you missed filing a 2021 tax return, don’t worry! If you file your taxes as soon as possible, you can still benefit if you’re eligible.
Housing Assistance for Low Income Renters
For families with a net income under $35,000 and singles with a net income under $20,000, they may receive a one-time tax-free payment of $500 under the Canada Housing Benefit program. To qualify for the top-up, an application form to confirm the renter’s age, income, residency and address of rental property is required. Additionally:
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- Renters must pay at least 30 per cent of adjusted net income on shelter costs
- Rental payments must be for a renter’s own primary residence in Canada
- The address of the property and landlord’s contact information must be included
The Canada Housing Benefit program is a collaboration between the federal and provincial governments to assist people in subsidized housing and is not usually available to the general public. This top-up payment will not affect other government programming based on net income, such as the:
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- Canada Child Benefit
- Canada Workers Benefit
- GST Credit
- Guaranteed Income Supplement
Dental Benefits for Children in Lower Income Families
Based on familial net income, families with children under 12 years of age may qualify for an up-front tax-free payment for dental work in 2022 through the Canada Dental Benefit. The exact eligibility criteria are as follows:
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- The family has no private health care plan
- All out-of-pocket dental expenses are accompanied by receipts
- Qualifying amounts paid are retroactive to October 1, 2022—so remember to keep your receipts!
The amounts payable based on the family net income are:
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- Family net income under $70,000 = $650 per each eligible child
- Family net income between $70,000 and $79,999 = $390 per each eligible child
- Family net income between $80,000 and $90,000 = $260 per each eligible child
As with the Canada Housing Benefit, the Canada Dental Benefit will not affect other income-tested programs.
These new pieces of federal legislation may alleviate some of the financial stress and debt for many Canadians. While you may be able to apply for these new and amended programs on your own via CRA My Account, you may be able to expand your eligibility for additional benefits by talking to a tax accounting or financial advisor. For example, you can learn more about how contributing to an RRSP can increase your refundable tax credits by decreasing your family net income. Your investment strategy matters a lot when it comes to tax-efficiency, so remember to use the resources available to you when and where you can.
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