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What is the Canada Affordability Plan and Who is Eligible?

Written by Jessica Steer
With inflation rising rapidly in Canada, Canadian’s are looking to the federal government for help. They have recently announced that they are coming out with the Canada Affordability Plan that has a cost totaling $8.9 billion in new support. This plan is meant to help those who are having a difficult time with the cost of inflation make life more affordable. This plan covers more than just extra payments, it also helps with things like dental care or other costs that aren’t covered already.
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    Who is eligible for the Canada Affordability Plan?

    This is a tough question to answer because there are so many different parts to this plan. Every piece of it has different qualifications.

    Canada Workers Benefit

    Those who are eligible for the CWB will be receiving more in benefits. The exact amount is unknown, just that it is more. Those who are currently receiving these benefits are getting extra support through their 2022 tax return.

    Old Age Security

    If you receive OAS you will be getting an increase to your existing benefits, as long as you are 75 or older. This can work out to an extra $800 per year for those who receive a full pension.

    Universal Early Learning and Childcare System

    This system is set to save families around 50% of what they normally pay just this year. Depending on the province that you live in, the savings will be different.

    Province Savings
    British Columbia Up to $6,000
    Ontario Up to $6,000
    Alberta Up to $5,610
    Nova Scotia Up to $4,690
    Newfoundland and Labrador Up to $5,090
    Saskatchewan Up to $3,910
    New Brunswick $3,910
    Prince Edward Island $3,390
    Manitoba $2,610

    Quebec has their own child care programs but the government will assist with creating 37,000 new openings.

    Housing Affordability Payment

    It’s no secret that housing prices are higher than ever, whether you are buying or renting. Since it will take time to build more affordable housing and other issues that make it difficult to afford the current prices, the Canadian government is going to be giving $500 as a one-time payment to nearly 1 million people who are struggling to afford housing.

    Canada Dental Benefit

    While the government does cover health care for Canadian families, dental is usually only covered if you have some form of dental insurance. Since many Canadians avoid dental care due to the cost, if you have an annual family income of $90,000 or less, the government will be helping with dental coverage. As of right now, the program is available in two periods. The first period started October 1, 2022 and goes until June 30, 2023. It comes as a tax free payment of either $260, $390or $650 for each eligible child that is 11 or younger. Keep in mind that this is only available to those who don't have access to any private heath insurance. You can also only get a maximum of 2 payments per child and, unlike some other government benefits, you do have tp apply in order to receive the tax free payments. .

    Inflation on Government Benefits

    Government benefits like the Canada Child Benefit, GST Credit, Canada Pension Plan, OAS and Guaranteed Income Supplement will be rising to reflect the current inflation. This means you will be getting more money on top of your existing benefits.

    Climate Action Incentive Payments

    Certain provinces like Ontario, Manitoba, Saskatchewan and Alberta receive the Climate Action Incentive benefit payments from the Canada Revenue Agency because of the government's price on pollution. Depending on where you are the amounts will differ for the 2023-2024 year.

    Province Amount
    Ontario $976
    Manitoba $1,056
    Saskatchewan $1,360
    Alberta $1,544

    Keep in mind these numbers are based on a family of four and as of July 2023 more provinces and territories will be added to this list. A good portion of the time, families will receive more in incentives than they pay. The government also emphasizes that as the prices for pollution increase, the benefits given will increase as well.

    When does the Canada Affordability Plan start?

    The Canada Affordability Plan started in 2022 but the different phases of it will be starting at different times. The old age security started July 2022 and other aspects like the one time housing payment and the free dental care were also predicted to start in 2022. Things like the GST increase and the full implementation of the $10 a day daycare can take up to 2025 to be in full swing.

    While there are no exact dates as to when the relief will be coming for Canadians, the government is working on implementing their plan as soon as they can. Some of these programs have already been implemented in late 2022 but we will see more as we progress further into 2023.

    When will renters expect to receive money?

    The tax-free $500 on-time payment that is expected to come out, will enhance the Canada Workers Benefits payments. This payment was expected to be out by the end of 2022, it was just waiting on Parliamentary approval and Royal Assent of enabling legislation.

    What is the Canada Housing Benefit program?

    This helps to provide relief to families with a net income below $35,000 or individuals below $20,000. In order to receive it, you have to apply and be approved first. The requirements are:

    • Must be paying and prove you are at least 30% of adjusted net income on a place to live
    • Prove that you pay rent for your primary residence and provide the address, amount of rent that was in the year as well as the landlords contact information
    • Consent to the CRA verifying information

    Once you are approved you will be able to receive the payments as well as the one time $500 top up. This payment won’t affect the amounts from any other government benefits you receive like the Canada Child Benefit, the Goods and Services Tax Credit and the Guaranteed Income Supplement.

    How do you apply for the Canada Affordability plan?

    How you apply for this program depends on the parts of it that you qualify for. Many of the factors in this plan are government benefits that people have already applied for and their benefits amounts will just increase. The childcare portion of it will slowly be implemented across the country and won’t be in the form of funding. You will just pay less money directly to the childcare provider.

    The Canada Housing Benefit program has not been launched yet but it has already been included in the federal government's 2022 budget so it shouldn’t be much longer before the exact details of how to apply have been released.

    Lastly, the dental care program is based on what you earn in the previous tax year. That being said, you do still need to apply to receive the payments. You can do this over the phone or online through the Canada Revenue Agency.

    Is dental care currently covered in Canada?

    Like we mentioned above, currently, unless you have dental benefits (either with an employer or elsewhere) or have purchased a private benefits plan, dental care will be paid out of your pocket. This is the reason a lot of people avoid it and can often end up going to the hospital when their dental issues become too bad. Many tooth infections can become dangerous and need to be treated, often with tooth removal. With this new support becoming available, hopefully a lot of this will be dealt with.

    What is the current Goods and Services Tax credit in Canada?

    In Canada, currently you can receive different amounts from the GST credit depending on if you are single, married or have any children.

    Single $496
    Married/Common-law $650
    Each child under 19 $171

    You are eligible for this benefit based on your tax return from the previous year. It is calculated based on your family net income as well as the amount of children that you have. In order to qualify, your net income must be under $52, 255. If you qualify, this payment is made every 3 months either via check or direct deposit.

    What will the increase be?

    While the federal government is promising to update the GST payments as well as other government benefits, they are currently saying there will be a short term boost in the GST payments and was to be paid out in a lump sum by the end of 2022. Once it is approved it is expected to last 6 months.

    The changes in payments will be that a single parent who makes less than $30,00 can receive up to $386.50 on extra. A family with children that makes less than $35,000 can get up to another $467.

    What is considered low income in Canada?

    That amount that is considered to be low-income by the federal government changes over time and is defined by the median household income. If the income is less than 50% of the median low income then it is considered to be low income. This is also adjusted based on family size. A couple and a family of 5 with the same incomes would fall in different categories.

    The current low-income threshold in Canada are:

    Size of Family Low Income Threshold
    1 person $27,589
    2 people $34,346
    3 people $42,224
    4 people $51,267
    5 people $58,145
    6 people $65,578
    7 people $73,011
    If more than 7 (each additional person) $7,433

    Different numbers may be used in different programs based on the province's criteria. This, however, is the general average for Canada

    What can you do until the Canada Affordability Plan comes into effect?

    While the Canada Affordability Plan is there to help many Canadians, what do you do if you need money and you don’t qualify or the program hasn’t started to receive these new and enhanced benefits? Well, if money is the issue, Spring Financial can help. No matter your credit score, we offer personal loans ranging from $500 to $35,000. Apply online in just 3 minutes and get your funds in as soon as 24 hours. You can also give us a call at 1-888-781-8439.

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