The Canada Workers Benefit (CWB) was introduced to address the financial challenges faced by lower- and middle-income workers in Canada. Over the past four decades, wage prospects for these workers have stagnated, making it harder to make ends meet. Many struggle to support their families and afford basic necessities like healthy food and clothing for their children.
In Budget 2018, the Canadian government introduced the CWB as a tax benefit to put more money in the pockets of low-income workers. Here are the key points about the CWB:
The CWB is a refundable tax credit designed to assist individuals and families who are working and earning a low income. The CWB was introduced in 2019 as a replacement for the Working Income Tax Benefit (WITB). It provides eligible individuals and families with tax relief through a combination of a basic amount and a disability supplement for those who are eligible for the Disability Tax Credit.
Summary of CWB
- Basic Amount: The CWB consists of two parts:
- Basic Amount: This is the primary component of the CWB. It provides financial support to low-income workers. You can claim the CWB when you file your income tax return.
- Disability Supplement: In addition to the basic amount, there is a disability supplement for eligible individuals with disabilities.
- Advance Payments: Starting in July 2023, the CWB will provide advance payments through the Advanced Canada Workers Benefit (ACWB). These advance payments are equal to 50% of the CWB and will be distributed across three payments. The goal is to put more money in workers’ pockets to help them cope with the rising cost of living.
- Canada Workers Benefit Eligibility:
- To qualify for the CWB, you must be working and earning income.
- You must be a Canadian resident and file an income tax return.
- The CWB is available to individuals aged 19 and older who have lived in Canada for the entire year. However, specific criteria allow those under 19 to claim the credit as well.
- Automatic Enrollment: If you received the CWB in 2022, you will automatically receive the advanced payments—there’s no need to apply separately.
How Much is the Canada Workers Benefit?
The maximum CWB amount depends on on your income, your province or territory of residence, your marital status and whether you have dependants. Here are some key points:
- Maximum Benefit Amount: The maximum CWB benefit is $1,428 for a single individual (gradually reduced if your income is over $23,495) and $2,461 for families (gradually reduced if your family income is over $26,805).
- Income Threshold: The CWB is designed to provide financial assistance to low-income workers. The maximum benefit is typically available to individuals with low to moderate incomes. As your income increases, the benefit gradually decreases. You won’t receive any basic benefit if your income exceeds $33,015 for individuals or $43,212 for families.
- Additional Amount for Disability: If you have a disability, you may be eligible for an additional CWB amount. The maximum amount for the disability supplement for individuals with disabilities is $737 (for both single or family). For single individuals, the CWB disability supplement is gradually reduced if your adjusted net income is more than $33,018. No disability supplement is paid if your adjusted net income is more than $37,932. For families, the CWB disability supplement is gradually reduced if your adjusted family net income is more than $43,210. No disability supplement is paid if one spouse is eligible for the disability tax credit and your adjusted family net income is more than $48,124, or if both spouses are eligible for the disability tax credit and your adjusted family net income is more than $53,037.
Advanced Canada Workers Benefit
The Advanced Canada Workers Benefit (ACWB) is an initiative that provides advance payments to eligible low-income workers in Canada. Here are the key details:
- Purpose and Background:
- The ACWB is an extension of the Canada Workers Benefit, which is a refundable tax credit designed to assist individuals and families with low incomes.
- Starting in July 2023, the ACWB offers advance payments to help workers cope with the rising cost of living.
- Eligibility:
- If you received the CWB in 2022, you are automatically eligible for the ACWB advance payments—there’s no need to apply separately.
- The ACWB eligibility is based on factors such as income, marital status, and the number of dependents.
- Advance Payments:
- The ACWB provides three quarterly advance payments throughout the year.
- These payments are equal to 50% of the CWB that you would typically receive when filing your income tax return.
- The advance payments are distributed in July, October, and January.
- Claiming on Your Tax Return:
- When you file your 2023 tax return, you’ll still need to report the ACWB as part of the CWB.
- Keep track of the ACWB payments using the RC210 statement provided by the Canada Revenue Agency (CRA).
Advanced Canada Workers Benefit Payment Dates
The Advanced Canada Workers Benefit (ACWB) payments in 2024 are:
- First payment: January 12, 2024
- Second payment: July 12, 2024
- Third payment: October 11, 2024
Who is ineligible for the Canada Workers Benefit?
Individuals may be disqualified from receiving CWB if any of. the following applies:
- Full-time students (with exceptions): You would not be eligible if you were enrolled full-time (more than 13 weeks) at a designated educational institution and don’t have an eligible dependant on December 31st of the tax year.
- Incarceration: You wouldn’t qualify if you were confined to a prison or similar institution for at least 90 days during the year.
- Diplomatic status: You wouldn’t be eligible if you’re exempt from paying taxes in Canada because you’re an officer or servant of another country (like a diplomat) or a family/employee of such a person.