Are you a low-income earner struggling to make ends meet? In Quebec and Canada, there are programs set up by governments to ease the financial burden of people whose income is struggling to cover basic needs. Here are a few of the low-income assistance programs you can take advantage of if you’re in this situation.
Tax credits
The federal and provincial governments make various tax credits available to low-income earners to reduce their tax debt.
These include the medical expense tax credit, which lets you deduct medical expenses from your income, and the solidarity tax credit, which replaces the QST credit, the property tax refund and the credit for individuals living in a northern village. Repayment is made monthly by direct deposit into the beneficiary’s account.
To qualify for the solidarity tax credit, you must apply for it when you file your income tax return. In some cases, the credit can be claimed retroactively.
GST tax credit
In Canada, the equivalent of the solidarity tax credit is the GST tax credit. This non-taxable credit is designed to help families living on or below the poverty line recover a portion of the sales taxes they pay over the course of the year. The refund is issued every three months.
If you live alone, you may also be eligible for a single-person or single-parent tax credit. This is granted by the Quebec government.
It’s well worth visiting the Quebec government website to find out about the different tax credits available.
The shelter allowance program
The Quebec government also provides an allowance for individuals or families who spend too much of their budget on housing costs. Depending on your situation and annual income, the allowance can be as much as $170 per month. The amount is revised each year according to your situation and income.
The work premium
If you’re on social assistance, you may be entitled to a tax credit called a work premium. This refundable tax credit is designed to encourage you to enter the job market if you haven’t already done so.
Low-income workers are also entitled to this credit to encourage them to stay in the workforce. Amounts range from $961.18 to $3,351.50 per year (source: Revenu Québec, 2022), depending on the marital status of the beneficiary.
The work premium supplement
Under certain conditions—for example, if you’re in a transition period and plan to return to work soon—you can also apply for the work premium supplement when you file your income tax return. This financial assistance amounts to $200 per month and can be granted for up to 1 year.
TFSA: Tax-Free Savings Account
The federal government announced this program in 2008 to allow low-income earners and others to save money that will remain tax-sheltered.
So, if you’re a low-income earner, you can invest money each month without worrying about paying tax on it when you withdraw it. There are many different and flexible TFSAs to choose from. So you can adjust your type of investment to suit your financial situation.
And if you’re having trouble filling out your tax return and can’t afford to hire a professional, there’s a support service offered by the Quebec government.