1. TAXES, BENEFITS, CREDITS: Myths and Realities
April | WNH | Financial Empowerment and Problem Solving
TAXES, BENEFITS, CREDITS: Myths and Realities
Why Do We Have to Talk About This?
April West Neighbourhood House Financial Advocacy and Problem Solving

2. The FEPS (Financial Empowerment and Problem Solving) Program is generously funded by the Ontario Ministry of Community and Social Services and delivered in partnership with:
These FEPS training materials and support documents created by West Neighbourhood House for the FEPS program.

3. Why is it important to discuss this?
Redistribution of income through the income tax system
There are many myths
Low Income Families  Barriers
Social/Community Workers  Barriers
Low income families face many barriers:
Lack of information
Low literacy
Intimidated by the system
Maybe new in the country
Maybe not enough English language ability
Social/Community Workers also face barriers:
Usually not low income
Most of the benefits do not apply to them
Not enough training in specific income support programs
Not good with numbers / aversion to numbers
Too many variables in the eligibility criteria. Example: child tax benefit and immigration status of the primary caregiver
Names of the programs could be confusing, for example CPP survivor pension and Allowance for the Survivor (OAS/GIS)
Programs like CPP disability, ODSP, WSIB, Canada Revenue Agency (for the Disability Tax Credit Certificate), LTD insurance, use different definitions of “disability”
April | WNH | Financial Empowerment and Problem Solving
April West Neighbourhood House Financial Advocacy and Problem Solving

4. April 2015 | WNH | Financial Empowerment and Problem Solving
Myths
“I don’t have to do my income tax because I don’t have to pay taxes”
“I’ll receive CTB
because my son was born here”
If you don’t have any income or your income is very low, it is still in your best interest to file an income tax return if you are eligible for GST credit and the Trillium Benefit. To receive these credits you have to file an income tax return.
Eligibility for Child Tax Benefit is based on
Residence
Immigration Status: only Canadian citizens, Permanent Residents, Protected Persons or Temporary Residents, as defined in the Immigration and Refugee Protection Act
Income
If the primary caregiver of the child or the spouse of the primary caregiver do not meet the immigration status criteria, they are not eligible for the Child Tax Benefit, regardless of where the children were born.
April West Neighbourhood House Financial Advocacy and Problem Solving

5. April 2015 | WNH | Financial Empowerment and Problem Solving
Myths
“I sponsored my mother and she doesn’t have any income.
I claim her as my dependent in my income tax return, so I pay less taxes.
She can’t file her own income tax because she is in mine as my dependent…”
“I haven’t done my taxes in 6 years. I won’t call CRA because they won’t help me…”
The fact that the parent is claimed as a dependent by her daughter or son doesn’t mean that the daughter or son can receive refundable tax credits on their behalf. Still the mother should file her own income tax return in order to receive the GST credit and the provincial tax credits (In Ontario, the Trillium Benefit)
Customer Service at the Canada Revenue Agency is almost excellent.
At FAPS we have to contact them very often. We found that in a 98% of the cases the service is helpful, polite and accessible.
People could ask for the application of the fairness provisions, to request the waiving of penalties or reducing the interest, etc.
April West Neighbourhood House Financial Advocacy and Problem Solving

6. April 2015 | WNH | Financial Empowerment and Problem Solving
Myths
“I can’t do my taxes because I don’t have a SIN. I’m not eligible for a SIN.”
“I can’t do my taxes because my employer pays me cash
Canada Revenue Agency expects payment of taxes for any income, even if the income is obtained by illegal activities, example: prostitution, drug dealing, bribes, fraud, etc.
When a person do not have a Social Insurance Number, and is not eligible for one, this person can file an income tax return without a SIN. Canada Revenue Agency will send a letter asking for SIN, and how to obtain one. After the individual explains that he/she is not eligible for a SIN, Canada Revenue Agency will provide a Temporary Taxation Number, and this is the number they will use to identify their account. Or the person first request a TTN from CRA, and then file taxes. (It’s not so simple if you are not sure in which part of the process you are)
This TTN is ONLY to deal with Canada Revenue Agency.
If you do not have the TTN, initiate ONLY one process with CRA: or you file your IT, or you send the Application for GST for newcomers.
After you have a TTN, you can communicate with several CRA offices if needed.
Regardless of what kind of payment you receive, you will be able to do your income tax return,
April West Neighbourhood House Financial Advocacy and Problem Solving

7. April 2015 | WNH | Financial Empowerment and Problem Solving
Myths
My husband got the Citizenship card for my son, born overseas, before coming to Canada.
I can’t receive CTB because I don’t have any status in Canada…”
In this case, a real story, the woman lost 8 months of benefits. She had been in contact with several community workers at different community agencies and received different (and incorrect) information from all of them.
She was told that she didn’t qualify for the CTB because she didn’t have a SIN and the husband had not started the sponsorship process with Immigration, so she didn’t have any status in Canada.
Fact is that she was entitled to the Child Tax Benefit the minute she had a foot in Canada because her husband was a Canadian citizen.
To be eligible for the CTB, the primary caregiver OR her/his spouse has to be a Canadian Citizen, a Permanent Resident, a Temporary Resident or a Protected Person as defined by the Immigration and Refugee Protection Act.
April West Neighbourhood House Financial Advocacy and Problem Solving

8. Redistribution of Income through the Tax System
April | WNH | Financial Empowerment and Problem Solving
Redistribution of Income through the Tax System
Income Support Programs dependent on filing an income tax return:
Goods and Services Tax Credit (GST credit)
Child Tax Benefit (CTB)
National Child Benefit Supplement
Canada Learning Bond (CLB)
Child Disability Benefit
Canada Education Savings Grant (40% and 30% of RESP contribution)
Canada Disability Savings Grants (100%,200%,300%, max $3,500)
Canada Disability Savings Bonds ($1,000 yearly)
Guaranteed Income Supplement (GIS)
Allowance (for the spouse of the GIS recipient)
Allowance for the Survivor
Ontario Child Benefit (OCB)
Ontario Guaranteed Annual Income Supplement
Ontario Senior Homeowners’ Property Tax Grant
Ontario Trillium Benefit (Started in July 2012 – OEPC + OSTC)
Ontario Children’s Activity Tax Credit
Children’s Fitness Tax Credit
If eligible for the National Child Benefit and your child was born in 2004 or later, he or she will be eligible for the Canada Learning Bond.
To be eligible for the Child Disability Benefit, or be able to start a RDSP, you need to apply for a Disability Tax Credit Certificate, T2201.
Canada Education Savings Grants: The % of the grant depends on your income, 40% in the first $500 you save, if your net income is less than $43,561
To save $500 a year is to put away $40 every month + a payment of $20.
April West Neighbourhood House Financial Advocacy and Problem Solving

9. Income Base Year
Determines GST credit payments you receive in
Determines amount of Child Tax Benefit (CTB) and of Ontario Child Benefit payments you receive
Determines amount of Guaranteed Income Supplement (GIS) Allowance, and Allowance for the Survivor
Determines amount of Ontario Trillium Benefit payments you receive, depending also in the amount of rent/property taxes you paid
2013
July 2014
From July 2014 to June 2015
From July 2014 to
June 2015
These payments are adjusted quarterly.
October 2014
January 2015
April 2015
2014
July 2015
From July 2015 to June 2016
From July 2015
to June 2016
These payments are adjusted quarterly
October 2015
January 2016
April 2016
2015
July 2016
From July 2016 to June 2017
From July 2016
to June 2017
October 2016
January 2017
April 2017
Benefits dependent on filing an income tax return run from July to June of the following year.
It is for this reason that when a newcomer applies for Child Tax Benefit or GST, CRA asks for their income before coming to Canada.
Example: If a person arrives in April 2013, in the application for Child Tax Benefit and for GST they have to include their “world” income in 2012 and in 2011 and for the portion of 2013 before coming to Canada.
To continue receiving the CTB and GST they have file a 2013 income tax return during the tax season (Before April 30th 2014).
April West Neighbourhood House Financial Advocacy and Problem Solving

10. Example: Ontario Works benefits
April | WNH | Financial Empowerment and Problem Solving
Example: Ontario Works benefits
FAMILY 1 – Couple with two children under 6, one of them has severe disabilities
FAMILY 2 – Couple with two children under 6, one of them has severe disabilities
This two families are receiving OW benefits.
Both families have children who were born in Canada in 2008 and 2010.
Both families have a child with severe disabilities.
If well the information is for Manitoba, the point that we want to make relates to the Child Tax Benefit that is a federal program.
April West Neighbourhood House Financial Advocacy and Problem Solving

11. Income from Ontario Works
April | WNH | Financial Empowerment and Problem Solving
Income from Ontario Works
Family 1 - Income:
OW Basic Needs: $ 463
Shelter $ 710
Special Diet $ 50
ACSD $ 450
$1,673
Family 2 - Income:
OW Basic Needs: $ 463
Shelter $ 710
Special Diet $ 50
ACSD $ 450
$1,673
Both families receive income from Ontario Works:
Basic Assistance for couples with 2 children under 12: $453
Special Diet supplement, $30
Shelter with some kind of subsidy: $ 695 a month.
Both families receive the maximum for ACSD: Assistance for Children with Severe Disabilities (ODSP), $450
Their basic total income is $1,628 monthly
April West Neighbourhood House Financial Advocacy and Problem Solving

12. GST credit and Trillium Benefit
April | WNH | Financial Empowerment and Problem Solving
GST credit and Trillium Benefit
Family 1
GST Credit: $ x 4 = $830
Trillium Benefit: $133 x 12 = $1,596
TOTAL $2,426
Family 2
GST Credit: $ x 4 = $830
Trillium Benefit: $133 x12 = $1,596
TOTAL $2,426
Both families receive GST credit of $808 annually.
Both families will receive the Trillium Benefit for a total of $1,548.in a year.
Total from these credits: $2,356 yearly
April West Neighbourhood House Financial Advocacy and Problem Solving

13. April 2015 | WNH | Financial Empowerment and Problem Solving?
What are the
Differences?

14. Differences in Benefits
April | WNH | Financial Empowerment and Problem Solving
Differences in Benefits
Family 1 – Is also eligible for:
Child Tax Benefit Basic $245.17
National Child Benefit Supplement $357.91
Child Disability Benefit $220.83
Ontario Child Benefit $222.67
UCCB $320.00
Total monthly amount $1,366.58
+Ontario Works $1,673
Total Income: $ 3,039.58
Family 2 – Is also eligible for:
Transition Child Benefit $460
Total monthly amount $460
+Ontario Works $1,673
Total Income: $ 2,133
A monthly difference of
$906.58

15. April 2015 | WNH | Financial Empowerment and Problem Solving
Why does this happen?
Family 1 has status in Canada.
Canadian Citizens
Permanent Residents
Protected Persons
Temporary Residents
They ARE eligible for Children’s benefits
Family 2 are Refugee Claimants
They ARE NOT eligible for Children’s benefits
This is an important difference.
In the case of Family 2 they are refugee claimants. They are not eligible for Child Tax Benefit and the benefits included on it – National Child Benefit Supplement and Child Disability Benefit Supplement; or the new Universal Child Care Benefit, which has the same residence and immigration status requirements than the CTB.
April West Neighbourhood House Financial Advocacy and Problem Solving

16. Because this family is not eligible for the Child Tax Benefit.
In our practice, we often see that a couple in the same situation receives much less money for GST and Trillium Benefit:
*GST credit is $136 x 4 = $544
Difference of $71.50x 4 = $286
*TB: $85.17 x 12 = $1,022
Difference of $47.83 x 12 = $574
Family 1 –
GST credit: $207.50x 4 = $ 830
TB: $133x12= $1, TOTAL $2,426
Family 2 –
GST credit: $207.50x 4 = $ 830
TB: $133x12= $1, TOTAL $2,426
WHY ?
Because this family is not eligible for the Child Tax Benefit.
Still, they need to complete an application and explain that they just want to register their children for GST and Trillium Benefit
Both families receive GST credit of $808 annually.
Both families will receive the Trillium Benefit for a total of $1,548.in a year.
Total from these credits: $2,356 yearly
April | WNH | Financial Empowerment and Problem Solving
April West Neighbourhood House Financial Advocacy and Problem Solving

17. What are the magic numbers?
$44,701
(eligible for full CTB, some NCB, CLB, 40% of CESG, CDB)
$26,021
(eligible for full NCB, Disability Bond if eligible for RDSP)
$20,400
(eligible for Ontario Child Benefit)
Those are the income bracket that trigger benefits.
If your family’s net income is less than $43,561 your family is eligible for the full basic Child Tax Benefit, for some National Child Benefit, for the Canada Learning Bond, for the 40% of CESG., for the Child Disability Benefit (if qualify)
If your family’s net income is less than $25,356 your family is eligible for the full National Child Benefit. If eligible you or a member of your family is eligible for the RDSP, this person will be eligible for the Disability Bond.
If your family’s net income is less than $20,000, your family is eligible for the Ontario Child Benefit.
April | WNH | Financial Empowerment and Problem Solving
April West Neighbourhood House Financial Advocacy and Problem Solving

18. $44,701 4% for two children or more. Canada Child Tax Benefit
Basic benefit: $
Tax –back threshold: $44,701
Child Disability Benefit:
Monthly benefit: $224.58
Tax-back threshold: 44,701
Take back rate: 2% for one child.
4% for two children or more.
April | WNH | Financial Empowerment and Problem Solving
April West Neighbourhood House Financial Advocacy and Problem Solving

19. $26,021 National Child Benefit Supplement $189.92 - 1st child
$ nd child
$ – each additional child
Take back rate: 12.2% for the first child
23.0 % for the second child
33.3 % for each additional child
April | WNH | Financial Empowerment and Problem Solving
April West Neighbourhood House Financial Advocacy and Problem Solving

20. $20,400
Ontario Child Benefit: $ monthly Reduced by 8% of family net income over $20,400
April | WNH | Financial Empowerment and Problem Solving
April West Neighbourhood House Financial Advocacy and Problem Solving

21. $44,701 For children born after Dec 31, 2003 Canada Learning Bond:
$500
$100 each year until age 15
Canada Education Savings Grants
40% in the first $500 saved = $200
April | WNH | Financial Empowerment and Problem Solving
April West Neighbourhood House Financial Advocacy and Problem Solving

22. Registered Disability Savings Plan
Disability Savings Bond
Income Bond
$26, $1,000
$44,701 No bond is paid
April | WNH | Financial Empowerment and Problem Solving
April West Neighbourhood House Financial Advocacy and Problem Solving

23. RDSP Canada Disability Savings Grant Income Grant Maximum
$87,907 (or less)
On the first $500 $3 x $1 $1,500
On the next $1,000 $2 x $1 $2,000
More than $89,401
On the first $1, $1 x$1 $1,000
April | WNH | Financial Empowerment and Problem Solving
April West Neighbourhood House Financial Advocacy and Problem Solving

24. Income limits to qualify for benefits
Canada Child Tax Benefit
Basic benefit: $122.58
Tax –back threshold: $44,701
National Child Benefit Supplement (NCBS): $189.92
Tax-back threshold: $26,021
Child Disability Benefit: $224.58
Tax-back threshold: $44,701
The Canada Child Tax Benefit has 3 main components:
Basic Benefit. Tax-back threshold: $43,561
Tax-back rate:
1 child: %
2 + children: %
NCBS: Tax-back treshold: $25,356
1 child 12.2%
2 children 23%
3+ children %
Child Disability Benefit:
For families receiving the NCBS
April | WNH | Financial Empowerment and Problem Solving
April West Neighbourhood House Financial Advocacy and Problem Solving

25. All our services are FREE Call 416 848 7980
Money Worries?
Financial Problems?
We can help you:
file tax returns
access banking services
get social assistance benefits
avoid scams and financial fraud
deal with debt problems
All our services are FREE
Call
Financial Advocacy & Problem Solving Program
West Neighbourhood House
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April | WNH | Financial Empowerment and Problem Solving
April West Neighbourhood House Financial Advocacy and Problem Solving