Benefits and credits explained

In Canada, many groups receive help from social programs and benefits, such as:

• families and individuals with low or modest incomes
• students
• adults 65 years and older
• persons with disabilities
• newcomers

The taxes we pay to the government help pay for the programs and services it offers. This includes benefits and credits.

Taxes

Taxes

Delivering benefits and credits

The Canada Revenue Agency (CRA) processes tax returns and collects taxes, but also administers certain benefits and credits.

The CRA issues benefits and credits in different ways, such as:

• one-time payments
• regularly issued payments (monthly or quarterly)
• tax credits you claim when you do your taxes

Tax credits

Tax credits

These benefit and credit payments can help people in different situations, including:

• students paying their tuition
• families paying for child care and food
• seniors paying for their medication
• low-income working individuals paying their rent
• newcomers paying for costs related to settling in Canada

The CRA also administers many provincial and territorial programs. Payments from the programs are often combined with the federal payments, although some are issued separately.

This lesson covers the most common benefits and credits administered by the CRA.

Newcomers to Canada

If you are new to Canada, you should check your eligibility and apply for benefit and credit payments as soon as you arrive. If you have questions, contact the CRA.

Canada child benefit (CCB)

The Canada child benefit (CCB) is a tax-free payment that helps families with the cost of raising children under 18 years of age.

Tax-free payment

Tax-free payment

People who receive the CCB can use their payments to help pay for products and services like:

• housing
• food
• daycare
• diapers
• clothing

The CRA sends CCB payments once a month, usually on the 20th, to the person responsible for caring for the child. These payments include amounts from related provincial and territorial programs with the exception of Quebec.

If your child is eligible for the disability tax credit, your CCB payments may also include the child disability benefit.

Disability tax credit (DTC)

Disability tax credit (DTC)

You must also meet other criteria related to your citizenship and residency status. If you have questions, contact the CRA.

Citizenship status

Citizenship status

Residency status

Residency status

Applying for the CCB

Generally, you should apply for the CCB as soon as:

• your child is born
• a child starts to live with you

You can apply for the CCB:

• using the Automated Benefits Application
• online through My Account
• by mail using Form RC66, Canada Child Benefits Application

Automated Benefits Application

Automated Benefits Application

My Account

My Account

Newcomers to Canada

If you are a new resident of Canada, you should apply for the CCB as soon as you meet the eligibility requirements.

To apply for the CCB, fill out and sign:

• Form RC66, Canada Child Benefits Application, and
• Form RC66SCH, Status in Canada and Income Information.

By filling out these forms, you apply for all child and family benefit payments like the CCB, as well as for the GST/HST credit and the Canada Carbon Rebate (CCR). You don’t need to fill out a separate form to apply for these payments.

If the child started to live with you more than 11 months ago, you need to provide supporting documents.

The CRA needs time to process your application.

Goods and services tax/harmonized sales tax (GST/HST) credit

One of the most common taxes you pay is income tax, but you also pay sales tax when you buy goods and services. Individuals living in the same province or territory will pay the same amount of sales tax on items bought, regardless of their income.

The goods and services tax/harmonized sales tax (GST/HST) credit helps individuals and families with low or modest incomes offset the sales tax they pay.

The GST/HST credit is a tax-free payment that eligible individuals receive every 3 months (usually on the 5th of July, October, January, and April). These payments include amounts from related provincial and territorial programs.

You can generally receive GST/HST credit payments once you turn 19.

If you are under 19

You can receive GST/HST credit payments if you have (or had):

• a spouse
• a common-law partner
• a child

Applying for the GST/HST credit

You don’t need to apply for the GST/HST credit. To receive it, you must simply do your taxes. The CRA uses information from your return to see if you are eligible.

The CRA calculates your GST/HST credit payments using your net income. You don’t need to submit any documents showing the amount of GST/HST you actually paid during the year.

Newcomers to Canada

If you are a resident of Canada for tax purposes, you can apply for the GST/HST credit as soon as you arrive in Canada, using the method that applies to you.

To apply for the GST/HST credit, fill out and sign:

• Form RC151, GST/HST Credit and Canada Carbon Rebate Application for Individuals Who Become Residents of Canada

You will only use this form to apply for the GST/HST credit if you are not eligible to apply for the CCB (for example, if you don’t have children or if you do have a child, but you don’t yet meet the other requirements for the CCB).

If you are eligible for the CCB, you should fill out the CCB application. When you apply for the CCB, you also apply for all child and family benefit payments, as well as for the GST/HST credit and the CCR, at once.

Net income

Net income

Canada workers benefit (CWB)

The Canada workers benefit (CWB) helps give a financial boost to individuals and families working and earning a low income.

The CWB can help with the cost of things like:

• transportation to work
• clothes for work
• supplies for work

The CWB includes a basic amount and a disability supplement if you are eligible for the disability tax credit. The amount you can receive for the CWB depends on your income and where you live.

You claim the CWB as a refundable tax credit when you do your taxes.

Refundable tax credits

Refundable tax credits

Advanced Canada workers benefit (ACWB)

The advanced Canada workers benefit (ACWB) is an advanced payment of the Canada workers benefit.

If you are eligible for the CWB when you do your taxes for the previous year, the CRA will automatically calculate and issue the ACWB for the current year.

You are no longer required to apply for this benefit using the Form, RC201, Canada Workers Benefit Payments.

Eligible individuals receive the payments in July, October, and January. To receive the advanced payments, the CRA must receive your income tax and benefit return for the previous year before November 1 of the current year.

Canada Carbon Rebate (CCR) (formerly known as Climate action incentive payment)

The Canada Carbon Rebate (CCR) is a tax-free benefit paid to help individuals and families with the cost of the federal pollution pricing. The benefit includes a basic amount and a supplement for residents of small and rural communities.

The CCR is available to residents of:

• Alberta
• Manitoba
• New Brunswick
• Newfoundland and Labrador
• Nova Scotia
• Ontario
• Prince Edward Island
• Saskatchewan

The CRA sends CCR payments in April, July, October and January.

You can generally start receiving the CCR once you turn 19.

If you are under 19

You can receive the CCR if you have (or had):

• a spouse
• a common-law partner
• a child

Applying for the CCR

You don’t need to apply for the CCR. The CRA uses information from your tax return to see if you are eligible.

Newcomers to Canada

If you are a resident of Canada for tax purposes, you can apply for the CCR using the method that applies to you.

To apply for the CCR, fill out and sign:

• Form RC151, GST/HST Credit and Canada Carbon Rebate Application for Individuals Who Become Residents of Canada

You will only use this form to apply for the CCR if you are not eligible to apply for the CCB (for example, if you don’t have children or if you do have a child, but you don’t yet meet the other requirements for the CCB).

If you are eligible for the CCB, you should fill out the CCB application. When you apply for the CCB, you also apply for all child and family benefit payments, as well as for the GST/HST credit and the CCR, at once.

Disability tax credit (DTC)

The disability tax credit (DTC) is a non-refundable tax credit. The DTC helps people with physical or mental impairments reduce the income tax they may have to pay.

Non-refundable tax credits

Non-refundable tax credits

The DTC helps offset the costs related to an impairment, such as:

• medication and equipment
• home accessibility expenses
• specialist fees
• travel to appointments

You may also be able to transfer your DTC to a supporting family member, if they provide you with things like:

Supporting family member

A family member who provides one or more of the basic necessities of life (food, shelter, and clothing) to the individual with the impairment.

• food
• shelter
• clothing

Being eligible for the DTC opens the door to other federal, provincial, or territorial programs, such as:

• registered disability savings plan (RDSP)
• Canada workers benefit
• child disability benefit

Registered disability savings plan (RDSP)

Registered disability savings plan (RDSP)

Applying for the DTC

You may apply for the DTC any time during the year. You must complete Part A of Form T2201, Disability Tax Credit Certificate, either using the digital form or the paper form. A medical practitioner must complete Part B of that form. The form may be submitted to the CRA digitally or by mail.

Need the form in an alternate format

The form can be ordered in alternative formats such as:

• digital audio
• electronic text
• braille
• large print

Benefits Finder

If you want to see what other kinds of benefits are available, you may use the Benefits Finder.

To see what you may be eligible to receive, you have to answer a few questions.

Knowing your responsibilities

You don’t need to apply for your benefits and credits every year, but you do have certain responsibilities.

To avoid delays or a stop to your benefits, you must:

• do your taxes every year
• update your information
• respond to the Canada Revenue Agency (CRA) (if you are asked for information)

You can generally still receive the payments you’re entitled to if you are late fulfilling a responsibility, but you may need to send more documents.

Doing your taxes

The CRA calculates many benefit payments using information from your income tax and benefit return. This is why it is important to do your taxes every year, even if you had no income or your income was tax-exempt.

Income tax and benefit return

Income tax and benefit return

You should always do your taxes by the deadline to make sure the CRA has time to calculate your benefit payments. For most individuals, the deadline is April 30.

Calculating family net income

If you have a spouse or common-law partner, the CRA needs information from both of you to know what you’re entitled to.

Each of you has to do your taxes every year to receive your benefit and credit payments.

The CRA will combine your incomes to determine your family net income. The CRA uses this amount to calculate your payment amounts.

When to expect your benefit payments

To be better prepared to keep receiving your benefit and credit payments, it helps to know the timeline the CRA follows to calculate them.

A tax return provides information about your tax situation in a tax year. You can start to do your taxes in February after the previous tax year ends on December 31.

Tax year

Tax year

The CRA uses information from your return to calculate your benefit and credit payments. The CRA issues most of these payments from July of one year to June of the next year. This period is called the benefit year.

Updating your information

Your tax return generally shows the most recent and accurate information the CRA has on file for you. The CRA calculates most of your benefit and credit payments a few months after you do your taxes.

A lot can happen in a few months, such as:

• getting married
• having a baby
• moving to a different province or territory

This is why you should contact the CRA if your personal situation changes.

The effect on your benefit and credit payments

Your benefit and credit payment amounts can go up or down when your personal situation changes, including a change to:

• your marital status
  If you have a spouse or a common-law partner, the CRA uses your family net income to calculate your payments
• the province or territory where you live
  Some provinces and territories offer extra payments for the people who live there
• the number of children in your care
  Many benefits and credits include amounts for children in your care

The CRA issues your payments based on the information it has available. When your information is not up to date, you may receive more or less than what you are entitled to. The CRA will make adjustments to balance your account. This could mean that you are missing out on benefit payments when you need them or have to pay an amount you received back to the CRA.

Reaching the right person

It’s important to update your:

• address
• phone number
• banking information

Keep your contact information up to date to make sure your payments go to the right place. This also lets the CRA know how to reach you, if needed.

Responding to the CRA

If you receive a letter or a phone call from the CRA, don’t panic! It’s normal for the CRA to contact individuals to ask for more information or supporting documents.

You might hear from the CRA if:

• you recently applied for a benefit and a document was missing
• the CRA needs to confirm some of your information
• your account was selected for review

What to do if you receive a letter from the CRA

Often, a letter from the CRA will ask for:

• proof of your marital status
• proof of your address
• proof that you are the person primarily responsible for your child

Read a CRA letter carefully and send any requested information as soon as possible. You can call the number on the letter if you have questions or need more time.

You can send requested information:

• electronically through My Account
• by fax, to a fax number given in a letter
• by mail, to an address given in a letter

Contact the CRA if you didn’t respond to a letter and were asked to pay back your benefits. You may still be able to send the necessary information and restart your payments.