No doubt you’ve experienced sticker shock at the grocery store. Just a few years ago, it seemed mostly limited to exorbitantly high prices for cauliflower, which apparently resulted from drought in California.
These days, it’s common to joke about whether you should buy tomatoes or a coat, spend your money on chicken or fix your car. Yes, prices have gone up a lot and these kinds of decisions are increasingly our new reality as inflation continues to rise. Stretching your income to pay all of your bills is getting harder and harder, especially for low- and middle-income Canadians.
The Government of Canada is continuing to introduce income tested benefits for struggling Canadians. The newest one, unveiled in the recent budget, is meant to offset the sharply rising cost of groceries. It’s a welcome relief, with Canada’s Food Price Report predicting a 5-7% food price increase in 2023. As a result, the average family of four will spend a whopping $16,288 on food this year.
So how do income tested benefits work?
The idea of income tested benefits is to target them to those who need it most. Governments are able to determine eligibility based on income, assets, and other factors. This is meant to help reduce poverty by providing financial assistance to individuals who are finding it hard to make ends meet.
And what’s good for individuals is also good for the economy. These kinds of benefits help stimulate it by increasing the purchasing power of low-income households. This leads to increased consumer spending and the creation of jobs, which bolsters economic growth.
What income tested benefits are available?
Some of the more notable income tested benefits in recent years were the Canada Emergency Response Benefit (CERB) and the Canada Child Benefit (CCB).
The CERB was introduced in response to the COVID-19 pandemic as a temporary benefit to provide financial assistance to individuals who lost their jobs or had their hours reduced due to the pandemic. It was available to anyone who had earned at least $5000 in the previous year and who were not eligible for Employment Insurance (EI) benefits.
The CCB was introduced in 2016, replacing the previous system of child benefits. It continues to provide financial assistance to low- and middle-income families with children under the age of 18. The amount is income tested, meaning it’s based on the family’s income (as well as other considerations like the age and number of children).
The Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit is another benefit with income eligibility. This tax-free payment is made to individuals to help offset the impact of the GST/HST on their expenses. It’s this benefit that the new grocery rebate will be tied to. The budget announced a one-time payment for low- and middle-income Canadians to offset grocery store inflation. Cauliflower, tomatoes, chicken: check.
How can an accountant help you with income tested benefits?
Not all Canadians are required to file taxes if they don’t earn a lot of income, but it’s important to do so because you may qualify for income tested benefits like these. An accountant can provide valuable guidance and support to individuals and families, assisting them to navigate complex criteria and maximize their financial assistance.
Hiring an accountant can help you determine whether or not you’re eligible for income tested benefits, and identify strategies to maximize the benefits you receive. They can also assist with the application process ensuring that all required information is provided accurately and on time.
Additionally, accountants provide ongoing support to make sure you receive the correct benefits and to monitor changes in your circumstances or income that could affect your eligibility.
Expert support
Getting expert advice from an accountant can help reduce your overall tax burden and maximize the benefits you receive. This can be especially important for individuals who don’t feel confident in their tax knowledge, or don’t have the resources to navigate complex tax laws and regulations on their own.
Accountants are also skilled at budgeting and can provide financial planning advice to help you handle your money more efficiently. If you’re struggling with debt, they can help you develop a plan to manage it.
You aren’t alone
It’s a safe bet that you aren’t the only one who’s feeling stressed about feeding their family as prices continue to rise. That’s why governments are working towards solutions to make these expenses more affordable, including introducing new income tested benefits.
At MMT Chartered Professional Accountants, we provide valuable resources to help you navigate complex financial systems and improve your overall financial situation. We understand how challenging government programs and financial resources can seem. That’s why we offer a wide range of services focused on individuals, families, and small business owners.
Whether you need help with tax preparation, budgeting, or accessing income tested benefits, we’re here to help. Our focus is on providing practical, actionable advice that helps you achieve real results. Contact us today to learn more about our services and find out how we can help you with the financial assistance you need to thrive.
