Applying for Canada Workers Benefit

To read more chapters, click below:

Chapter 1: 10 tax benefits that low-income Canadians should be aware of

Chapter 3: How to apply for GST/ HST credit in 2023?

Chapter 4: All you need to know about Canada Child Benefit

Chapter 5: 8 ways in which Canada’s New Affordability Plan helps make life cheaper for you

Chapter 6: All that you need to know about Canada Dental Benefit

Chapter 7: Ontario – Income Tax Brackets, Rates, & Provincial Tax Credits

Chapter 8: Quebec – income tax brackets, rates, and provincial tax credits

Chapter 9: Understanding the Tuition Tax Credit in Canada: All You Need to Know

Chapter 10: Understanding Canada Training Credit

Chapter 11: Maximizing Your Tax Return: Uncovering the Benefits of Seniors' Tax Credits in Canada

Chapter 12: Canada Taxes 2022: Federal Tax Brackets, Rates and Credits

If you have spent some time in Canada, you must have heard about Canada Workers Benefit. But do you actually know the details about it, and how you can claim the benefits (if you are eligible for it). In this chapter we’ll discuss all that you need to know about Canada Workers Benefit and applying for it.

Let’s start with the basics and understand what is Canada Workers Benefit, before we proceed to know its eligibility and the process to apply for claims.

Canada Workers Benefit (CWB) is a federal government program in Canada designed to provide financial assistance to low-income individuals and families who are part of the workforce. It replaced the Working Income Tax Benefit (WITB) in 2019. The Canada Workers Benefit provides eligible individuals with a tax credit of up to $1,428 and eligible families with up to $2,461 to bolster their incomes. To qualify for the CWB, you must meet specific criteria, including paying taxes, earning a working income below the net income threshold established for your province, and being a Canadian resident aged 19 or older as of December 31 in the year you're filing your taxes.

For individuals who received the CWB in 2022, the Canada Revenue Agency (CRA) will issue advance payments automatically without the need for a separate application process.

How does CWB work?

The benefit is provided in two parts – Basic Amount and Disability Supplement.

• Basic amount

The basic benefit is the core component of the CWB, and it provides financial assistance to eligible low-income individuals and families who are part of the workforce. The basic benefit is calculated based on your working income, family size, and other factors. It is designed to supplement the earnings of individuals and families with lower incomes. The amount you receive as a basic benefit depends on your income level, and it gradually phases out as your income increases.

• Disability Supplement

In addition to the basic benefit, the CWB includes a disability supplement for eligible individuals with a severe and prolonged disability. The disability supplement is intended to provide extra financial support to individuals who face additional financial challenges due to their disability. To qualify for the disability supplement, individuals must meet specific criteria related to their disability status and income.

These two components of the CWB work together to provide targeted financial assistance to individuals and families in Canada who have lower incomes or who face additional financial barriers due to disabilities. The CWB is designed to help reduce poverty and improve the financial well-being of low-income Canadians who are part of the labor force. Please note that the specific details of the CWB, including income thresholds and benefit rates, may change over time, so it's essential to check with the Canada Revenue Agency (CRA) or the official government website for the most up-to-date information.

Eligibility

To qualify for the CWB, individuals and families must meet certain criteria, including having eligible employment income, being residents of Canada for tax purposes, and filing a tax return. The benefit is income-tested, which means the amount you receive depends on your income and family size.

Some of the general eligibility requirements include –

• Being a resident of Canada for tax purposes
• Earning a working income
• Being at least 19 years old on December 31 of the tax year you're filing for
• Filing an income tax return

Factors that make you ineligible for CWB

You won't qualify for the Canada Workers Benefit if you –

• Are a Full-Time Student: If you are enrolled in a full-time educational program at a recognized institution for more than 13 weeks in a year, you generally won't be eligible. However, there is an exception if you have dependents.
• Have Been Incarcerated: If you've spent 90 days or more in prison during a year, you won't be eligible for the benefit.
• Hold Diplomatic or Foreign Service Roles: If you are a diplomat, an employee, or an official representing another country in Canada, you are not eligible for the Canada Workers Benefit. Likewise, your family members who are dependent on your diplomatic or foreign service status are also ineligible.

Income requirements for CWB

The Canadian government has established maximum income thresholds based on specific categories of earners to determine eligibility for various benefits and programs. These thresholds vary depending on the household composition. Here's a breakdown of the income criteria for different categories –

• Individuals: For single individuals with no dependent children, the maximum income threshold is set at $32,244. This means that individuals earning more than $32,244 may not be eligible for certain benefits or assistance programs.
• Single Earner Families with Dependent Children: In the case of single-earner families who have dependent children, the household's primary earner must have an income below $42,197 to qualify for certain benefits and assistance programs. This threshold is designed to ensure that families with a single breadwinner receive necessary support.
• Couple Earners: For households with two earners, such as spouses or common-law partners, the combined income of both individuals should be less than $56,197 to be eligible for certain benefits and assistance programs. This threshold accounts for the fact that dual-income households may have a higher total income but still need assistance based on their family size and expenses.

Please note that while these income thresholds are generally applicable to most Canadian residents, they may differ for residents of specific provinces or territories. For example, the thresholds for Alberta, Quebec, and Nunavut may not align with the national averages due to regional variations in the cost of living and economic conditions.

Residents of these provinces or territories should refer to their respective provincial or territorial government websites or contact local authorities to determine the income thresholds specific to their region.

How is CWB calculated?

The Canada Revenue Agency (CRA) assesses your eligibility for the Canada Workers Benefit (CWB) on an individual basis, considering various factors such as –

• Marital status
• Province or territory of residence
• Earned working income
• Adjusted family net income
• Presence of an eligible dependent
• Eligibility for the disability tax credit

To determine your eligibility and estimate the potential benefit amount, you can use the child and family benefits calculator available on the CRA website. This tool will provide you with insights into whether you qualify for the CWB and offer an estimate of the amount you may receive.

How to apply for CWB?

There's no need for you to submit an application for advance payments. The Canada Revenue Agency (CRA) will assess your eligibility when you file your income tax and benefit return. If you qualify for a Canada Workers Benefit (CWB) based on line 45300 of your income tax and benefit return, the CRA will initiate automatic payments to you.