On September 13, 2022, Finance Canada announced three new support programs for individuals to help combat rising costs from inflation. The programs are proposed at this stage and will require Royal Assent before coming into effect. Additional details will be provided when they become available.
Canada Housing Benefit Program
The government is proposing a one-time top-up to the Canada Housing Benefit program which will provide direct support to low-income renters who are experiencing housing affordability challenges. Eligible individuals can receive a $500 tax-free payment by the end of the year pending Royal Assent of the legislation.
The benefit will be available to renters with adjusted net income below $20,000 for individuals. For families to qualify, the combined adjusted net income must be below $35,000. Furthermore, applicants will have to attest that they:
- Are paying at least 30% of their adjusted net income on shelter;
- Are paying rent for their own primary residence in Canada. They must also disclose the address of the rental property, the amount of the rent paid in 2022, and the landlord’s contact information; and
- Consent to the Canada Revenue Agency verifying their information to confirm eligibility.
The program will be administered by the CRA. More details on the application and attestation process will be provided if the program is approved and receives Royal Assent.
Canada Dental Benefit
Finance has also proposed the Canada Dental Benefit which will provide eligible parents or guardians with tax-free payments to cover dental expenses for children under 12 years old. The program would provide payments up to $650 per child per year for families with adjusted net income under $90,000 per year and without dental coverage. The benefit payment would be as follows:
- Adjusted family net income below $70,000 – $650 per eligible child
- Adjusted family net income between $70,000 and $79,999 – $390 per eligible child
- Adjusted family net income below $80,000 and $89,999 – $260 per eligible child
The program will be administered by the CRA and parents will have to attest that:
- Their child does not have access to private dental care coverage;
- They will have out of pocket dental care expenses for which they will use the Benefit;
- They understand they will need to provide documentation to verify out of pocket expenses occurred (e.g. show receipts), if required.
More details on the application and attestation process will be provided if the program is approved and receives Royal Assent.
Increasing the GST/HST Credit
The government is proposing to double the GST/HST Credit for six months, which would deliver $2.5 billion in additional targeted support to current GST/HST Credit recipients. Eligible recipients will not need to apply for this increase as it will be automatically paid through the existing system as a one-time, lump-sum payment before the end of the year. Payment will depend on when the legislation receives royal assent.
Examples of benefit increases from the Finance Backgrounder:
A single mother with one child and $30,000 in net income will receive $386.50 for the July through December 2022 period, and another $386.50 for the January through June 2023 period under the current GST Credit. With the temporary doubling of the GST Credit amounts for six months, she would receive an additional $386.50. In total, she would be receiving about $1,160 this benefit year through the GST Credit.
A single senior with $20,000 in net income will be receiving $233.50 for the July through December 2022 period and another $233.50 for the January through June 2023 period under the current GST Credit. With the temporary doubling of the GST Credit amounts for six months, this senior would receive an additional $233.50. In total, he would be receiving about $701 this benefit year through the GST Credit.
A couple with two children and $35,000 in net income will be receiving $467 for the July through December 2022 period and another $467 for the January through June 2023 period under the current GST Credit. With the temporary doubling of the GST Credit amounts for six months, this family would receive an additional $467. In total, they would be receiving about $1,401 this benefit year through the GST Credit.
Resources
Backgrounder – Making Housing More Affordable: One-time top-up to the Canada Housing Benefit program
Backgrounder – Making Dental Care More Affordable: The Canada Dental Benefit
The information in this article is of a general nature and is in summary form. Contact one of our tax professionals to discuss these matters in the context of your situation before acting upon such information.
