SEED Winnipeg: Aileen Krush Community Financial Counselling Services: Sally Massey Wiebe SEPTEMBER 2017
SEED Winnipeg is a non profit agency that fights poverty and helps to renew Winnipeg s inner city. We do this by helping people start small businesses, save for future goals, and access benefits.
Community Financial Counselling Services, Inc. (CFCS) is a non-profit, United Way member agency. Our vision is that all Manitobans will have the capacity to make informed decisions and navigate successfully the various financial systems that have impact on their daily lives.
Who s in the room and why are you interested in this topic?
5 Pillars of Financial Empowerment Financial Literacy and Coaching Taxes and Access to Benefits Safe Financial Products Savings and Asset Building Consumer Protection Financial Empowerment Improving financial outcomes for low-income households, Prosper Canada
Successes and Challenges Last year 1187 participants 1046 tax returns 487 pieces of ID Over $3.5 million in tax returns and related benefits Can t meet the demand Frustrating for participants and service providers wanting to do referrals
What is primary identification? Birth Certificate (if born in Canada) Permanent Resident Card or Citizenship Certificate (for those born outside of Canada) Why is it important? Required to access other types of identification (Social Insurance Number, MB photo ID card, passport) May be requested to apply for other benefits (EIA, housing) To open a bank account To register children for school* Employment & Income Assistance (EIA) is now set up to direct bill Vital Statistics for Manitoba birth certificates. Participants can speak to their Case Coordinator.
Other forms of identification: Manitoba Photo Identification Card Driver s License Social Insurance Number Secured Certificate of Indian Status must call to book an appointment 204.983.5910
Links to Information & Resources: Citizen s Bridge http://necrc.org/index.php/services/economic-development/ Manitoba Birth Certificate Applications http://vitalstats.gov.mb.ca/certificate_apps.html Manitoba Photo ID https://www.mpi.mb.ca/en/id/card/pages/id-card-apply.aspx SIN Service Canada Locations http://www.esdc.gc.ca/en/sin/before_applying.page http://www.servicecanada.gc.ca/tbsc-fsco/sc-hme.jsp Secure Certificate of Indigenous Status https://www.aadnc-aandc.gc.ca/eng/1100100032421/1100100032422
Applying for Employment and Income Assistance (EIA): Most applicants will need to attend a Pre-Intake Orientation (PIO) After attending the PIO, they will attend an intake appointment. They will need to bring certain documents when they go: EIA Intake Checklist: https://www.gov.mb.ca/fs/eia/pubs/eia_checklist.pdf More information about applying for EIA: https://www.gov.mb.ca/fs/eia/apply.html EIA and EI Problem-Solving: Community Unemployed Help Centre http://www.cuhc.mb.ca/
Access to Banking: Banks started leaving inner-city and lower-income neighbourhoods in the 1990 s Pawn shops, payday lenders, and cheque-cashing outlets moved in to replace them Without easy access to banking services, residents became dependent on these companies, who charged high fees for small loans and cheque-cashing services SEED had an existing relationship with Assiniboine Credit Union (ACU); along with other organisations and individuals, they came together to address the issue The ACU branch at McGregor & College opened in 2012 Community Referral Program: ACU has partnered with over 20 community organisations to provide no-fee bank accounts to low-income individuals These accounts can be accessed with only one piece of ID and a letter from the referring organisation
ACU Community Referral Partners: TAX FILING AND ACCESS TO BENEFITS FORUM Career Trek John Howard Society of Manitoba Oshki-Giizhig Inc. Citizens Bridge Lavallee Community School Resource Assistance for Youth (RAY) Canadian Mental Health Association (MB and WPG) Community Economic Development Association (CEDA) Elmwood Community Resource Centre Fort Whyte Farms Immigrant and Refugee Community Organization of Manitoba (IRCOM) Mamawi Wi Chi Itata Centre (Ma Mawi) Mount Carmel Clinic Ndinawe Resource Centre North End Community Renewal Corporation North End Women s Centre SEED Winnipeg SSCOPE Inc. Urban Circle Villa Rosa Wayfinders
Tax filing is a Gateway to benefits in two ways: 1. Through accessing benefits as part of a tax return via: i. Non-refundable credits that might increase a refund or reduce a balance owed for a person with taxable income ii. Refundable credits that increase a refund (or reduce a balance owed) 2. Tax information is used to determine eligibility for other benefit programs that might provide: i. A direct monetary impact (e.g. Rent Assist program benefits that provide monthly income to help pay rent or children s disability benefit added to the monthly Canada Child Benefit for a child that qualifies for the Disability Tax Credit) ii. An indirect monetary impact (e.g. Manitoba Pharmacare program that ensures lower income earners with eligible medical costs pay a lower deductible, or eligibility for subsidized housing based on ) iii. Access to other Government programs to assist low income Canadians plan for the future (e.g. Canada Learning Bond/Canada Education Savings Grant via an RESP or Canada Disability Savings Bond/Grant via a RDSP)
1. Accessing benefits as part of a tax return: i. Non-refundable Tax Credits: Non-refundable tax credits essentially balance taxable income since they are calculated at the same rate as the lowest federal tax rate The more non-refundable credits a participant has, the more income they can earn before they start paying tax Once their non-refundable tax credits are equal or greater to their income they would have $0 federal tax to pay they gain no further benefit from adding more non-refundable credit amounts since one cannot pay less than $0 taxes and since these are NON-refundable credits they do not generate a refund if one has extra
Example: A participant has a T slip showing income of $11400. The Basic Personal Amount (a non-refundable tax credit that everyone is eligible to claim) is $11474. This participant will pay $0 in federal tax because their income is LESS THAN the Basic Personal Amount. They are non-taxable. If they also had a spouse with no income they can claim an additional $11474 as a non-refundable credit for a dependent spouse. Their total non-refundable credits would now be $22948. Their federal taxes owed would still be $0. Once you are non-taxable you are paying $0 in federal tax you can t pay less than that!
Common Non-refundable Tax Credits: NON-REFUNDABLE CREDIT Basic Personal Amount $11474 Age Amount $7125 Spousal Amount $11474 Eligible Dependent Amount $11474 Pension Amount $2000 Disability Tax Credit $8001 2016 AMOUNT
Disability Tax Credit (DTC) a commonly misunderstood non-refundable tax credit: DTC is a non-refundable tax credit (2016 basic amount of $8001) This means someone who is already non-taxable will often see little benefit on their tax return from being eligible for this credit DTC requires medical details provided to the CRA by a medical practitioner before a claim can be made on a tax return (Form T2201) CRA reviews the medical details and sends individual a Notice of Determination stating whether the DTC has been allowed and for which tax years DTC can be allowed permanently (no further medical proof required in subsequent tax years) or just for a period of time (requires repeat submission of the medical documents to continue the claim beyond the allotted time) DTC can be transferred to related tax payer if not required by eligible individual to reduce tax payable to $0 DTC can be applied retroactively to past 10 years if applicable - CRA DTC form T2201 now allows client to tick a box to automatically have prior years adjusted if DTC eligibility is granted A child eligible for the DTC is automatically eligible for the Children s Disability Benefit top up to the Canada Child Benefit (CCB) a maximum additional benefit of $2730 per child
1. Accessing benefits as part of a tax return (con t): ii. Refundable Credits: Refundable credits can generate refunds for eligible tax filers even if they have no income and have paid no taxes If there are no taxes payable all refundable credits will be paid in full to the client If the client has some taxes payable on their income, but the refundable credits exceed this amount, the difference will be paid to the client as a refund If the client has taxes payable on their income, but also has some refundable credits, the refundable credits will be used to lower the balance owed
Example: (Same example used above) A participant has a T slip showing income of $11400. The Basic Personal Amount (a nonrefundable tax credit that everyone is eligible to claim) is $11474. This participant will pay $0 in federal tax because their income is LESS THAN the Basic Personal Amount. They are non-taxable. If they also had a spouse with no income they can claim an additional $11474 as a non-refundable credit for a dependent spouse. Their total non-refundable credits would now be $22948. Their federal taxes owed would still be $0. Once you are non-taxable you are paying $0 in federal tax you can t pay less than that! If this participant happened to have $400 tax taken off their income source they will get it all paid back to them as part of a refund since they owe $0 federal tax the CRA will return to them the tax that was taken off at source as it was unnecessary and tax at source is a REFUNDABLE tax credit
Common Refundable Credits: TAX FILING AND ACCESS TO BENEFITS FORUM REFUNDABLE CREDITS Tax withheld at source Overpayment of CPP/EI premiums GST credit Working Income Tax Benefit (WITB) 2016 AMOUNTS Varies depending on income/situation Varies Varies (paid quarterly not with refund) Max $1028 (single) $1868 (family) Manitoba Personal Tax Credit Max $195 + $113 if 65+ Manitoba Education and Property Tax Credit ( rent credit ) Primary Caregiver Tax credit Max $1400 Max $700 (under 65) max $1100 (65+)
Refundable Tax Credit - Manitoba Primary Caregiver Tax Credit: Requires confirmation of level of care need by medical practitioner OR assessment at Home Care level 2 or higher Care recipients involved with Children s disability Services (age 3 or older) or Community Living disability Services (Mb Family Services programs) must apply through those programs Documents from medical practitioner must be verified by Regional Health Authority in the area where the Primary Care Recipient resides before the claim can be made on a tax return Primary Care Recipient: Person requiring care/support designates one individual as their care provider Can only designate one care provider at a time 90 day qualifying period at start of claim New application and new qualifying period required if changing care provider Primary Care Provider: Must provide unpaid care & support to care recipient Does not have to live with or be related to the care recipient Cannot claim any periods of time in a year when the care recipient spends more than 14 days in a hospital Can have more than 1 care recipient but maximum claim is $1400 per year (equiv of 1 person all year) Must live in Manitoba
2. Accessing other benefit programs linked to tax data: Federal and Provincial benefit programs all use tax data, along with personal/household details to determine eligibility Timely filing of tax matters ensures no delay or interruption in benefits from other programs (limited ability to retroactively access missed benefits in most programs) Both CFCS as part of Counselling Services and SEED as part of their Access to Benefits program provide system navigation regarding other benefit programs, application process and problem solving Access to Benefits intentionally added to Norquay Building CVITP tax clinic in 2017 (tax season 2016) with significant success Nearly 10000 tax returns completed Approximately $28,000,000 in refunds, annual GST and CCB benefits PLUS: 1072 benefit applications completed for another $773,000 in other benefits
FILING TAXES THE KEY TO BENEFITS
Single parent Two Children ages 2 & 4 Living in private rental market Employed part time Annual employment income $15000.00
Single parent Two Children ages 2 & 4 Living in private rental market Employed part time Annual employment income $15000.00 PLUS Benefits based on tax filing: GST Refundable Credit $ 842.00 ($210.50 paid quarterly) Canada Child Benefits: $12800.00 ($1066.66 paid monthly) Working Income Tax Benefit: $ 1844.00 (with refund OR part paid quarterly) MB Rent Assist Benefits: $ 5586.00 ($465.50 paid monthly) Manitoba Child Benefit $ 840.00 ($35.00 paid monthly) Mb Personal Tax Credit $ 266.00 (refund upon tax filing) TOTAL ADDITIONAL BENEFITS $22176.00 TOTAL ANNUAL INCOME $37178.00
Single parent Two Children ages 2 & 4 One child is disabled and eligible for the Disability Tax Credit Living in private rental market Employed part time Income of: $15000 from employment
Single parent Two Children ages 2 & 4 (One Child is Disabled) Living in private rental market Employed part time Annual employment income $15000.00 PLUS Benefits based on tax filing: GST Refundable Credit $ 842.00 ($210.50 paid quarterly) Canada Child Benefits: $15530.00 ($1294.16 paid monthly) (includes the Child disability benefit of $2730/yr) Working Income Tax Benefit: $ 1844.00 (with refund OR part paid quarterly) MB Rent Assist Benefits: $ 5586.00 ($465.50 paid monthly) Manitoba Child Benefit $ 840.00 ($35.00 paid monthly) MB Personal Tax Credits $ 379.00 (refund upon tax filing) MB Primary Caregiver credit $ 1400.00 (refund upon tax filing) TOTAL ANNUAL INCOME $ 41421.00
Single parent Two Children ages 2 & 4 (One Child is Disabled) Living in private rental market Employed part time TAX FILING AND ACCESS TO BENEFITS FORUM PLUS: The federal government will use annual tax data to provide this family with assistance in saving for the children s futures when they set up: Registered Education Savings Plans (RESP) The Canada Savings Program consists of the Canada Learning Bond (provides low income households with $2000 per child for post secondary education even if no other contributions are made into the RESP) and the Canada Education Savings Grant (Federal Government provides some matching contributions to an RESP, when RESP contributions are made by the family. Matched amount is dependent on household income up to a life time maximum of $7200 per child). Registered Disability Savings Plan (RDSP) for the disabled dependent Dependent on household income the Canada Disability Savings Bond program will provide a bond of up to $1000 per year into a RDSP to a lifetime maximum of $20000 and the Canada Disability Savings Grant will provide matching grants to annual RDSP contributions up to a maximum of $3500 per year with a lifetime maximum of $70000
List of federal benefits: TAX FILING AND ACCESS TO BENEFITS FORUM GST applications for New Canadians (RC 151) Canada Child Benefit Applications for New Canadians and households who have experienced a change in custody Registered Education Savings Programs/Canada Education Savings Program Disability Tax Credit Registered Disability Savings Programs Canada Pension Plan benefits Old Age Security pension Guaranteed Income Supplement (GIS) & Spousal Allowance or Allowance for the Survivor Adjustment requests to prior year returns
List provincial benefits: TAX FILING AND ACCESS TO BENEFITS FORUM Manitoba Prenatal Benefit Manitoba Child Benefit Program Manitoba Pharmacare Manitoba Primary Caregiver Tax Credit Manitoba Rent Assist Manitoba Tuition Fee Advance Credit (and adjustments for prior years) 55 Plus School Tax Assistance for Tenants 55 Plus (STAT 55)
GET YOUR BENEFITS! See guide for current resource links for Federal and Provincial Programs
QUESTIONS?