Budget 2021: Canada Workers’ Benefit increased

The Canada Workers’ Benefit (CWB) is a non-taxable refundable tax credit that supplements the earnings of low-income and medium-income workers. The CWB, which is generally available to workers who earn at least $3,000 annually, provides 26 cents for each dollar of working (employment and self-employment) income over that $3,000 threshold. There is also a disability supplement to the CWB for individuals for qualify for the federal disability tax credit.

There are maximum benefit amounts which can be paid to single individuals and to families, and the CWB is phased out where income exceeds specified amounts.

The Budget proposes to enhance the CWB in a number of ways. First, the phase-in rate will be increased from 26 cents to 27 cents per dollar of income. Second, the phase-out income thresholds will increase from $13,194 to $22,944 for single individuals and from $17,522 to $26,177 for families.

Changes will also be made to the CWB to enhance the benefit’s disability supplement. Finally, a “secondary earner exemption” will be introduced for couples who both qualify for the CWB. Under that exemption, the spouse with the lower working income will be able to exclude up to $14,000 of that income for purposes of computing the CWB phase out.

All of these measures are to be effective for the 2021 and subsequent taxation years.

For more information on the 2021 Federal Budget, please click here.