Empowering Workers Across Canada: A Comprehensive Guide to the Canada Workers Benefit

The Canada Workers Benefit (CWB) is a helping hand from the government designed to make life a bit easier for working Canadians who earn a lower income.

Think of the CWB as a financial boost for low-income individuals who are working hard but might still be struggling to cover all their expenses. It’s a way to reward your hard work and help ensure that, despite earning less, you can enjoy a better quality of life.

If you’re wondering whether this benefit applies to you, how to get it, and what steps you need to take, you’ve come to the right place. In this guide, we’ll break down everything you need to know about the CWB, including who qualifies for this benefit, how to apply, and even share some tips on making sure you’re getting the most money possible.

What is the Canada Workers Benefit?

The Canada Workers Benefit (CWB) is a refundable tax credit designed to help low-income workers and families. Imagine you’ve been working hard every day, but when you look at your paycheck, it feels like stretching those dollars to cover all your needs is a constant battle. The CWB steps in here—it’s like a financial pat on the back from the government for your hard work, especially if your earnings are on the lower side.

The CWB exists for a very important reason: to encourage more people to join the workforce and to offer a bit of extra support to those who are working but might still be struggling to make ends meet. It recognizes that even if you’re working, sometimes the pay isn’t enough to cover basic living costs. So, this benefit is there to help lift some of that financial pressure.

How does it work?

Think of the CWB as a bonus that comes in two parts:

A basic amount

This is the main part of the benefit. The exact amount of money you can get depends on how much you earn. If you earn less, you get more from the CWB, like a sliding scale. There’s a maximum amount you can receive, and this starts to decrease as you make more money until you reach a point where you earn too much to qualify.

A disability supplement

If you have a disability that makes working harder, there’s an extra part of the CWB just for you called the disability supplement. It’s an additional amount of money on top of the basic benefit. This extra money recognizes that people with disabilities might have more expenses or challenges, and it's there to give a bit more support.

Who qualifies for the Canada Workers Benefit?

To get the CWB, you need to tick a few boxes on the eligibility checklist. Here’s a simplified rundown:

Basic amount

You can get the basic part of the CWB if you meet all of the following criteria:

• You earn a working income, and your total income is less than the limit set for the place in Canada where you live.

• You're a resident of Canada for income tax purposes for the entire year.

• You’re 19 or older by the end of the year, or you’re living with a spouse, common-law partner, or child.

However, there are a few situations that would make you ineligible. You:

• Cannot be a full-time student at a designated educational institution for more than 13 weeks in the year unless you have a child or dependent who qualifies on December 31.

• Cannot be in jail or a similar place for 90 days or more during the year.

• Don’t pay taxes in Canada because you’re a diplomat or work for a diplomat from another country or you’re a family member of such a person.

Disability supplement

You might qualify for the CWB disabilities supplement if you meet all of the following criteria:

• You can get the disability tax credit because you have an approved Form T2201, Disability Tax Credit Certificate, with the Canada Revenue Agency (CRA).

• Your total income is less than the income limit for where you live in Canada.

Who is an eligible spouse or common-law partner?

For the CWB, a spouse that qualifies is someone who:

• Is living with you as your spouse or common-law partner by the end of the year.

• Has lived in Canada for the whole year.

Who is an eligible dependent?

To be considered a qualifying dependent for the CWB, the child must:

• Be your child, or your spouse or common-law partner’s child.

• Be younger than 19 and living with you at the end of the year.

• Not qualify for the CWB themselves.

Calculating your Canada Workers Benefit

The Canada Workers Benefit (CWB) is a bit of extra money you can get when your income is low and you’re working. Let’s look at what affects how much CWB you might get:

How much money you make

If you’re earning money from a job but not a lot, you could get the CWB. The more you earn, though, the less CWB you get. There’s a certain amount of money you can make before the CWB starts shrinking. If you earn more than this limit, the amount of CWB you can receive goes down gradually until it stops altogether.

Your CWB amount is also based on your entire household’s income, not just yours. This total household income, after certain adjustments, is called adjusted family net income. The government looks at all the money your family makes together to decide how much CWB you can get. This means including income from your spouse or common-law partner, too, which ensures the benefit amount fits your family’s overall financial situation.

Your marital status

Whether you’re single, married, or living with a common-law partner changes your CWB. As mentioned above, your CWB amount is based on your entire household’s income. Couples might see their CWB calculated together, affecting the total amount based on combined incomes and shared living costs.

If you have kids or dependents

People with kids or others depending on them usually get more CWB money. This is because it’s tougher to support others on a small income.

However, if you don’t have dependents, you can still get CWB, but the maximum amount you might receive and the income limit are usually a bit lower than for those with families.

Where you live

The cost of living isn’t the same everywhere in Canada, so the CWB changes based on your province or territory. Some places might have higher limits or calculate the benefit differently to help out with local living costs.

If you have a disability

If you’re eligible for the disability tax credit, you might also get more CWB. This is to help with the added costs that can come with having a disability.

How to apply for the Canada Workers Benefit

Applying for the CWB doesn’t involve a separate, complicated process. In fact, you might be doing it already without realizing if you’re filing your taxes. Here’s how it works:

File Your Taxes

It’s pretty straightforward. Each year, you need to complete and submit your tax return. This is something many people do already to report their income to the government. If you’re not sure how to do this, there are many resources and services available to help, some of which are free.

When filling out your tax return, make sure to accurately report all the money you’ve earned from your job(s). This is important because the amount of CWB you could receive depends on your income.

By simply filing your taxes, you’re automatically checked to see if you qualify for the CWB. If you do qualify, the Canada Revenue Agency (CRA) will calculate how much you should receive based on the information you’ve provided.

If you’re filing your taxes online, many tax preparation software programs automatically calculate your eligibility for the CWB when you file your taxes. This makes applying for the CWB effortless since it’s all done as part of your tax return. However, if you’re filing a paper return, you’ll need to fill out and submit Schedule 6, Canada Workers Benefit.

Getting the CWB starts with filing your income tax return, so make sure you do it every year to not miss out on possible benefits.

Required documentation and information

To ensure your tax return is complete and you’re considered for the CWB, you’ll need:

• Personal identification, such as your Social Insurance Number (SIN) and basic personal information.

• Your income information, such as T4 slips from employers, or if you’re self-employed, records of your business income and expenses.

• If applicable, have your Form T2201 (Disability Tax Credit Certificate) ready in case you’re applying for the disability supplement of the CWB.

What is the Advanced Canada Workers Benefit (ACWB)

As of 2023, if you qualify for the CWB, you can get 50% of it early through something called the Advanced Canada Workers Benefit (ACWB). This means you don’t have to wait until the end of the year to get all of it; instead, you get some of it in advance. If you’re also supposed to get extra money for a disability, you’ll get half of that amount early, too, along with your regular advance payments.

The advanced payments are issued in three payments in July, October, and January. You will receive them directly into yourbank account via direct deposit as a payment labelled “Canada PRO Deposit.”

To get these advanced payments, you need to be living in Canada on the first day of any quarter of the year.

You can figure out how much money you’ll get in advance by using the CRA’s child and family benefit calculator.

How quickly can you get the CWB?

The Canada Revenue Agency (CRA) will figure out if you can get early parts of your CWB if you do your taxes before November 1 of that benefit year. If you’re not eligible for advanced payments, you’ll receive the whole amount all at once when you file your tax return.

Benefits of receiving the Canada Workers Benefit

Receiving the Canada Workers Benefit (CWB) offers many perks, especially if you’re earning a smaller paycheck. Here are just some of the main benefits:

More money in your pocket

The CWB puts more cash in your wallet, making it easier to cover the essentials. Whether it’s for groceries, bills, or just a bit of breathing room in your budget, this benefit means you’re less stressed about where the next dollar is coming from.

Plus, raising kids on a tight budget is tough, but the CWB gives families with kids extra money. This can go a long way in covering everything from diapers to school trips to making sure your kids have what they need.

Encourages working

Knowing you’ll get this bonus makes working more appealing. It’s like getting a pat on the back for your hard work with some extra cash. This can be a big help for someone thinking about getting a job or sticking with one, as it sweetens the deal of earning a paycheck.

Helps make ends meet

For people finding it hard to make ends meet, the CWB is a lifeline. It’s all about giving you a hand up, not just a handout, helping you stand on your own two feet by making life a little more affordable.

Extra help for those with disabilities

If you or someone in your family has a disability, the CWB offers extra support. This acknowledges the extra costs and challenges that can come with disabilities, ensuring you’re not left behind.

Tax time bonus

Instead of dreading tax time, the CWB can turn it into an opportunity to get some money back. Even if you don’t owe on your tax return, you could get a refund because of the CWB. It’s like getting a bonus just for doing your taxes.

Good for the economy

Spending your CWB money isn’t just good for you; it’s great for local businesses, too. Buying from local shops or paying for services pumps money back into the community, which can lead to more jobs and a stronger local economy.