Manitoba Government Issues Cheques to Families and Seniors
On Wednesday August 31, our provincial government announced one-time payments to certain populations in our province, including families, some seniors, and an increase to the monthly payment for those Manitobans receiving EIA – Employment and Income Assistance.
The $87 million “Family Affordability Package” was announced to provide families with children, seniors living on a fixed income, and other low-income Manitobans with benefits to help ease the burden of rising costs due to inflation.
The payments are income tested so not all families and not all seniors will receive these additional payments.
Families with children under the age of 18 and household income of less than $175,000 in 2021 will receive a benefit cheque of $250 for the first child and $200 for each additional child.
It is estimated that approximately 145,000 payments will be sent out to families with children for a total of $63.6 million, with an average payment of $440.
For families with shared custody, we do not know yet how the payments will be issued; likely 50% to each parent?
Children turning 18; we do not know what the criteria for the payment will be; is the eligible child under 18 as of December 31 2021? Or as of August 31 2022?
Personally, I think the $175,000 threshold is too high for families to receive the one-time payment. It may have been better if it could have been tiered, just like the Canada Child Benefit, but that may have been an administrative hassle. However, the provincial government could have paid X% of what families are currently receiving for CCB and that would have been fair to families and taxpayers.
An estimated 52,500 senior households with a family income less than $40,000 will get a $300 cheque in the mail if they rent or own a home and claimed the education property tax credit on their 2021 income tax return.
We do not know the criteria for “senior”; is it 65+ as of December 31 2021? Or 65+ as of August 31 2022? We expect more details over the next few weeks.
EIA and Rent Assist
Manitobans receiving employment and income assistance (EIA), will also benefit through an increase to the basic needs rate starting in October 2022.
EIA general assistance clients without dependent children will receive an extra $50 per adult each month. All EIA disability clients will receive another $25 per household each month. We do not know what happens to the parents receiving EIA with children under 18; do they get a monthly increase too or just the one-time payments?
The increase to EIA rates is something that will have a big impact on people on social assistance. It’s the first general rate increase in nearly 20 years. An extra $50 a month is going to help a lot of these individuals.
Seniors with qualifying incomes who didn’t get the education property tax credit because they received employment and income assistance or rent assistance will still get a cheque. These low-income seniors do not claim the education property tax credit on their 2021 income tax return because of the provincial benefits they receive.
Cheques in the Mail
There is no need to apply. A cheque will be mailed by Manitoba Finance in the fall of 2022 (no specific date yet) to your address included on your 2021 tax return. If you need to update your mailing address, you will be able to access an online tool shortly. No announcement yet for those who do not or cannot access an online option; will there be a toll-free number? If you have moved and have mail forwarded then you should have the cheque redirected to your new address.
This is a refundable tax credit and not taxable income, so no tax slip will be issued, and it is not included as income on your 2022 tax return.
Low-income seniors who do not claim the education credit on their property taxes because they live with family or others will not qualify for these one-time payments.
And what about those who have not filed yet? Will you get a cheque later? We don’t know those procedures yet.
Personally, I agree with these one-time payments being somewhat income tested. These groups are especially affected by inflation and did not benefit from other tax reductions made in the past few years.
Other tax roll backs made in the past few years affected higher income Manitobans more then lower income individuals: reduction of the sales tax from 8% to 7%; elimination of provincial taxes on Will preparation, income tax preparation, home insurance, and personal services; elimination of probate fees; phasing out the education credit on property taxes.
All of these tax reductions are considered regressive: meaning they help those with more higher incomes and more assets than those with less disposable income and fewer assets.
Education Credit 2022 taxes for renters
Good news for renters next year. Effective starting in the 2022 taxation year, Manitoba will replace the renter’s component of the Education Property Tax Credit with a new renter’s tax credit that will apply to renters of residential properties. The new credit will fix the annual claim amount at $525, the same amount as in 2021 under the previous tax credit program. The new credit will no longer be calculated based on 20% of annual rents paid and will instead be calculated as a fixed monthly maximum claim amount, based on the number of months spent renting in a given year. The monthly amount will be $43.75 and will not be income tested. About 45,000 Manitobans who receive non-EIA Rent Assist or who live in social housing will be newly eligible to claim the credit.
There always seems to be something new announced by the federal or provincial governments. Lots of programs to keep track of for next tax season.
CAI – Rural 10% Supplement
Reminder from last month’s article to check the notice you received around July 15 regarding the Climate Action Incentive. If you are a couple living in rural Manitoba, check to see if your notice referred to the rural 10% supplement. If you think you were eligible, but did not get it, you can ask CRA to adjust the benefit. If you had your taxes completed at our office, we can look after it for you; just give us a call or an email.
Anni Markmann is a Personal Income Tax Professional and Certified Financial Planner; living, working, and volunteering in our community. Contact Ste Anne Tax Service at 204.422.6631 (phone or text!) or 36 Dawson Road in Ste Anne (near Co-op) or firstname.lastname@example.org