The start of a new benefit year – what can you receive in 2023-24?

At a time when Canadian households are coping simultaneously with ongoing inflation, especially food inflation, as well as interest rates which are at their highest point in decades, every dollar of income counts. And where that income can be obtained with minimal effort, and received tax-free, then it’s a win-win for the recipient.

Those attributes describe the basic child and family benefits paid by the federal government to eligible Canadians every month of the year. However, a substantial number of eligible recipients don’t receive benefits to which they are entitled simply because they haven’t claimed them, leaving potentially hundreds or thousands of dollars in tax-free income “on the table” each year. As well, many Canadians who do receive such benefits but who then fail to claim them annually can see their benefit payments stop, even though they remain eligible to receive those benefits.

While there are quite a number of such benefits, the process of “claiming” each of them is the same – simply filing a tax return each year. Eligibility for some (but not all) of the obtainable benefits and/or the amount of benefit obtainable is based, in part, on the income of the recipient. When each Canadian files a tax return, the Canada Revenue Agency determines, based on the information provided in the return, which benefits the taxpayer is entitled to and in what amounts. Where the amount of a taxpayer’s income is relevant to the determination of eligibility, the income figure used is that from the previous year. In other words, a taxpayer’s eligibility for benefits during the 2023-24 benefit year is based on his or her income for 2022. And that information was provided to the Canada Revenue Agency on the tax returns for 2022 which were filed by taxpayers earlier this year.

Once the CRA receives the needed income information (usually by April 30, 2023) and the Agency determines a taxpayer’s benefit eligibility, those benefits are paid to eligible recipients throughout the 2023-24 benefit year, which starts on July 1, 2023 and ends on June 30, 2024.

It should be noted, as well, that while the federal government refers to these benefits under the umbrella term “child and family benefits”, it’s wrong to conclude that benefits are only available to parents and/or married individuals. Of the five benefit programs outlined below which will be in place during the upcoming benefit year, only the Canada Child Benefit program requires that a taxpayer be a parent, and none of the benefit programs require that a taxpayer be married or in a common-law relationship.

GST/HST Credit

The GST/HST credit is a non-taxable amount paid four times a year (on the 5^th of July, October, January, and April) to low- and middle-income individuals and families, to help offset the goods and services tax/harmonized sales tax (GST/HST) that they pay. Generally, the credit is available to Canadian residents who meet any one of the following criteria:

• aged 19 yearsof age or older;
• have or had a spouse or common law partner; or
• are or were a parent and live (or lived) with their child.

The amount of benefit which may be received is determined by both family size and income level. For the upcoming (July 2023 to June 2024) benefit year, the maximum annual GST/HST benefit is as follows:

• $496 if you are single;
• $650 if you are married or have a common-law partner; and
• $171 for each child under the age of 19.

The CRA website includes a chart showing the amount of GST/HST benefit which is provided at different income levels, to individuals and to families of different sizes and compositions. That chart can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/goods-services-tax-harmonized-sales-tax-gst-hst-credit/goods-services-tax-harmonised-sales-tax-credit-payments-chart.html.

Eligibility for the GST/HST credit for the 2023-24 benefit year is determined automatically by the CRA for each taxpayer who filed a return for 2022. There is, therefore, no need to indicate on the return that the taxpayer is applying for the GST/HST credit.

Climate Action Incentive Payment

Unlike the other three credits which are based, at least in part, on household income, the Climate Action Incentive Payment (CAIP) is a flat rate non-taxable credit paid to residents of the provinces of Ontario, Manitoba, Alberta, Saskatchewan, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island. The purpose of the CAIP is to help offset the financial impact of the federal carbon tax.

In addition to living in one of these provinces, recipients must also satisfy the same eligibility criteria as for the GST/HST credit, in that they must be Canadian residents who are at least 19 years of age, or have or had a spouse or common law partner, or are or were a parent and lives or lived with their child.

The amount of CAIP which an individual can receive varies, depending on his or her province of residence. Information on the amount of CAIP which may be received in each province can be found on the CRA website at Climate action incentive payment – Canada.ca.

The CAIP (for all provinces) includes a rural supplement of 10% of the base amount for residents of small and rural communities. While there is no need to apply for the CAIP when filing a tax return, individuals who may be eligible for the rural supplement need to ensure that they complete and file a Schedule 14 indicating their eligibility for the supplement when they file their return for 2022. That requirement does not apply to residents of Prince Edward Island, where all CAIP recipients are eligible for the rural supplement.

When it was first introduced, the CAIP was claimed on the individual income tax return and paid as part of the tax refund process. Now, however, the CAIP is paid in quarterly instalments. During the 2023-24 benefit year, residents of Ontario, Alberta, Manitoba, and Saskatchewan will receive four quarterly payments, on the 15^th day of April, July, October, and January.

Since the federal fuel charge will only come into effect as of July 1, 2023 in Newfoundland and Labrador, Nova Scotia, and Prince Edward Island, residents of those provinces will receive three quarterly payments of the CAIP during the 2023-24 benefit year (in July 2023, October 2023, and January 2024) and four payments in subsequent benefit years. New Brunswick residents will receive a double payment in October 2023 (to cover the July and October payments) and a single payment in January 2024.

More information on the CAIP can be found on the CRA website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/cai-payment.html.

Canada Workers Benefit

The Canada Workers Benefit (CWB) is a refundable tax credit paid to lower-income Canadian residents who are aged 19 or older or are married or have a common-law spouse or child with whom they live, and who have “working income” earned from employment or self-employment.

The amount of CWB which an individual or family can receive depends on marital status and net income. The basic amounts payable, and the net income levels at which eligibility for that basic benefit is eroded, are as follows.

• $1,428 for single individuals
  The single individual benefit is reduced if adjusted net income is more than $23,495. No basic amount is payable if the applicant’s adjusted net income is more than $33,015.
• $2,461 for families 
  The family benefit amount is reduced if adjusted family net income is more than $26,805. No basic amount is payable where adjusted family net income is more than $43,212.

In order to apply for the CWB, a recipient must file his or her tax return electronically or, if filing a paper return, must complete and file a Schedule 6 with that tax return. In previous years, taxpayers were required to apply for advance payment of the CWB;  however, effective as of July 2023, CWB recipients who were eligible for the benefit in 2022 will automatically begin receiving quarterly advance payments of their CWB for 2023.

More detailed information on the CWB can be found at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-workers-benefit.html.

Canada Child Benefit

The Canada child benefit (CCB) is a tax-free monthly payment made to eligible families to help with the cost of raising children under 18 years of age. The CCB is paid to the parent who is primarily responsible for the care and upbringing of the child or children, and the amount varies with the age and number of children.

The CCB is also a means-tested benefit, and the benefit amount which may be received is reduced as family net income increases. CCB amounts paid during the 2023-24 benefit year are based on family net income for 2022.

The maximum amounts payable for the benefit year running from July 2023 to June 2024 are as follows.

For each child:

• under 6 years of age: $7,437 per year ($619.75 per month)
• 6 to 17 years of age: $6,275 per year ($522.91 per month)

Where family net income for 2022 is less than $34,863, recipients will receive the maximum amount outlined above for 2023-24, with no reductions.

Individuals and families who may be eligible for the CCB will have their eligibility automatically assessed when they file their tax return for 2022: there is no requirement to file a particular schedule or other application. More information on the CCB is available on the federal government website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview.html.

“Grocery Rebate”

As every Canadian who has purchased food in the past year knows, the cost of groceries has been steadily increasing, as the inflation rate for food costs has consistently outpaced the general rate of inflation. To address that situation, the federal government announced, as part of the 2023-24 federal budget, that eligible Canadians would receive a “grocery rebate”, which will be paid on July 5, 2023.

The term “grocery rebate” is something of a misnomer, since the amount of the rebate is not specifically tied to the cost of groceries, nor is there any requirement that amounts received be spent on groceries. Rather, the “grocery rebate” is simply a one-time payment to be made to Canadians who were eligible for and received a GST/HST tax credit payment in January of 2023, and the amount of the “grocery rebate” will be double the amount received of the January 2023 GST/HST tax credit payment. So, for example, an individual who received a GST/HST tax credit payment amount of $89.00 in January 2023 will receive (on July 5, 2023) a “grocery rebate” of $178.00.

More information on the “grocery rebate” can be found on the federal government website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits/goods-services-tax-harmonized-sales-tax-gst-hst-credit/grocery-rebate.html.

While the number and variety of federal child and family benefits, and the varying eligibility criteria for each, can be confusing, the necessary determinations and calculations are done by the federal government. The only step which need be taken by an individual is the filing of an annual tax return. Taxpayers who wish to find information on the benefits for which they may be eligible can refer to the Canada Revenue Agency website at https://www.canada.ca/en/revenue-agency/services/child-family-benefits.html, where detailed information on each such benefit, the eligibility criteria and amounts which may be received are summarized.