Canadian Government Benefits

[Ottawa]

I feel like this topic is more Tax Discussion than otherwise...

There are benefits accessible to the income levels of all Canadians.  Some benefits will be available to current workers, many will be available to FIREees.  I realize that while Federal benefits are potentially available to all, the provinces will have variable benefits. 

Bearing this in mind, I reside in Ontario - and so, this is what I know most about (and by most, I doubt I know everything about the benefits available, let alone how to optimize them)

So far, it seems the following benefits apply, at least to me:

Ontario Sales Tax Credit
Ontario Energy and Property Tax Credit
GST/HST Tax Credit
Canada Child Tax Benefit
Ontario Child Benefit
for above: https://www.canada.ca/en/revenue-agency/services/child-family-benefits/child-family-benefits-calculator.html

Ontario Electricity Supply Program https://ontarioelectricitysupport.ca/

I am happy to add more benefits to this list (i.e. ones that may be available to others). 

In addition, I'd like to have this as a resource that allows us to explore how to optimize each of the benefits. 

[daverobev]

Something that clicked a week or two back was that, if you're low income, having Canadian eligible dividends is bad for all of these things due to the grossing up. IE, your $10k of Canadian dividends 'looks like' $13800 in terms of money you 'earned'.

I shifted a chunk of my unregistered stuff from Canada to UK investments (not JUST for this reason, but partly). No withholding on UK stuff, and no gross up, and a decent yield.

[joonifloofeefloo]

daverobev, can you tell us more about this grossing up piece? Or point me somewhere...

[daverobev]

daverobev, can you tell us more about this grossing up piece? Or point me somewhere...

https://www.theglobeandmail.com/globe-investor/investor-education/what-is-a-dividend-gross-up-and-why-pay-tax-on-more-than-ive-earned/article26852575/

It's why if you are 'normal', you can get ~$40k in Canadian eligible divis tax free - but if you are fireing/retiring on low income, it actually costs you.

[joonifloofeefloo]

Thanks very much, daverobev! I'll read the article closely.

[daverobev]

Thanks very much, daverobev! I'll read the article closely.

I should really add that to my 'Tax vent' thread. I didn't even know at the time I posted it though.

It is an arse-backwards way of doing things. It should not be possible to lose benefits because you invest in Canadian companies. Just... bonkers.

[Prairie Stash]

GST credit - $36,429 is the magic number that you need to cross before income matters
https://www.canada.ca/content/dam/cra-arc/formspubs/pub/rc4210/rc4210-17e.pdf

[Prairie Stash]

CCB is $30,000
https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview/canada-child-benefit-we-calculate-your-ccb.html

Basic benefit for July 2016 to June 2018
We calculate the Canada child benefit (CCB) as follows:

$6,400 per year ($533.33 per month) for each eligible child under the age of six
$5,400 per year ($450.00 per month) for each eligible child aged 6 to 17

We start to reduce the amount of CCB you get when your adjusted family net income (AFNI) is over $30,000. The reduction is calculated as follows:

families with one eligible child: the reduction is 7% of the amount of AFNI between $30,000 and $65,000, plus 3.2% of the amount of AFNI over $65,000

families with two eligible children: the reduction is 13.5% of the amount of AFNI between $30,000 and $65,000, plus 5.7% of the amount of AFNI over $65,000

families with three eligible children: the reduction is 19% of the amount of AFNI between $30,000 and $65,000, plus 8% of the amount of AFNI over $65,000

families with four or more eligible children: the reduction is 23% of the amount of AFNI between $30,000 and $65,000, plus 9.5% of the amount of AFNI over $65,000

[SoftwareGoddess]

Applies to older retirees (age 65+), but still:

Ontario Drug Benefit Program: https://www.ontario.ca/page/get-coverage-prescription-drugs

[FrugalFan]

Great idea for a thread. Posting to follow.

[FrugalFan]

Applies to older retirees (age 65+), but still:

Ontario Drug Benefit Program: https://www.ontario.ca/page/get-coverage-prescription-drugs

Didn't know about this!

[FIRE Artist]

For Albertans

Carbon levy rebates
Single Albertans who earn less than $47,500/year and families who earn less than $95,000/year will receive a full rebate to offset costs associated with the carbon levy.

[Oatmeal Stout]

Applies to older retirees (age 65+), but still:

Ontario Drug Benefit Program: https://www.ontario.ca/page/get-coverage-prescription-drugs

Look up Ontario Trillium Drug plan - pay 4% of your household income and you're covered basically.
Anyone 24 or under is covered for drugs too now.

[Shinplaster]

Applies to older retirees (age 65+), but still:

Ontario Drug Benefit Program: https://www.ontario.ca/page/get-coverage-prescription-drugs

Didn't know about this!

There is also a new program where if you have an income of less than $19,300 for a single or $32,300 for a couple, the $100 deductible will be waived (for over 65).  Also your fee drops to $2, and since some pharmacies charge lower fees anyway, you might pay no fee.

You have to fill out an application though - the link to the form can be found through the link above.

[CanuckExpat]

In Ontario there would be the Ontario Trillium Benefit?

Good calculator here (for all provinces I think): https://www.canada.ca/en/revenue-agency/services/child-family-benefits/child-family-benefits-calculator.html

[Ottawa]

I was updating our RESP contribution room remaining and I came across this arcticle: http://www.moneysmartsblog.com/resp-additional-grants/ , which would suggest that based on lower income brackets there is an additional attraction of between 10% and 20% for the first $500 contributed.  Not big potatoes but could mean another 50 - 100 bucks per year contributed to the RESP.   

[SoftwareGoddess]

Look up Ontario Trillium Drug plan - pay 4% of your household income and you're covered basically.
Anyone 24 or under is covered for drugs too now.

Just to update the thread, if the bolded part is meant refer to the recently-added OHIP+ drug coverage for people under 25, the new Conservative government has reportedly reduced access to that program. It was initially universal, and now it is available only to people without private insurance coverage. (They haven't updated the relevant government websites yet as far as I can see, but they've announced it to the media.)

[Prairie Gal]

For low income seniors there is the Guaranteed Income Supplement (GIS) and here in Alberta we also have an Alberta Seniors benefit.

Low income widows and widowers may qualify for the Allowance for the Survivor from ages 60-64.

For these programs, it is worth checking what is "income" and what is not.