What does the Working Income Tax Benefit do for low-income workers?
Published on 27/03/2017
Canada’s social safety net includes a variety of programs intended to support people experiencing long-term or temporary poverty. One such program is the Working Income Tax Benefit (WITB) for individuals who are employed but have low incomes, and their families.
The federal government has indicated that it will expand WITB by approximately $250 million per year beginning in 2019 to “provide additional benefits that roughly offset incremental Canada Pension Plan (CPP) contributions for eligible low-income workers.” The changes to CPP will be phased in, starting in 2019. These changes mean that workers will be paying higher CPP contributions from their paycheques. Low-income workers especially could feel the impact on their take-home pay.
The WITB expansion could be an opportunity to take a step back and consider the program as a whole – how it is designed, whether it is meeting its goals, and how an expansion can improve the program as a whole as well as offset the cost of higher CPP contributions. However, based on the most recent federal announcements, it seems that the expansion will be limited to slightly increasing benefit amounts with no significant changes in the program design.
This backgrounder provides an introduction to the program, explores how it impacts low-income workers, and how it could be improved.