In a substantial move to support low-income workers, the Government of Canada is enhancing the Canada Workers Benefit (CWB) starting July 12, 2025.
This increase aims to assist individuals and families in managing everyday expenses amid rising living costs. The updated benefit will be distributed in quarterly installments, providing timely financial relief across the country.
Understanding the Canada Workers Benefit (CWB)
The Canada Workers Benefit is a refundable tax credit designed to supplement the earnings of low-income workers, thereby encouraging workforce participation. It comprises two main components:
- Basic Amount: Provides financial support based on income and family status.
- Disability Supplement: Offers additional assistance to eligible individuals with disabilities.
Key Changes Effective July 2025
The 2025 enhancements to the CWB include increased maximum benefits and adjusted income thresholds to better reflect current economic conditions. Below is a detailed breakdown:
| Category | 2025 Maximum Benefit | Income Threshold for Phase-Out | 2024 Maximum Benefit | 2024 Income Threshold for Phase-Out |
|---|---|---|---|---|
| Single Individuals (no children) | $1,633 | Begins at $26,855; ends at $37,474 | $1,590 | Begins at $26,149; ends at $36,749 |
| Families | $2,813 | Begins at $30,639; ends at $49,391 | $2,739 | Begins at $29,833; ends at $48,093 |
| Disability Supplement | $843 | Begins at $37,740; ends at $42,222 | $821 | Begins at $36,748; ends at $41,230 |
Eligibility Criteria for 2025
To qualify for the basic CWB amount, applicants must meet the following conditions:
- Residency: Must be a resident of Canada throughout 2024.
- Age: Must be 19 years of age or older by December 31, 2024, unless living with a spouse, common-law partner, or child.
- Working Income: Must have earned a minimum of $3,000 in working income during 2024.
Disability Supplement Eligibility
Individuals seeking the disability supplement must:
- Be approved for the Disability Tax Credit with a valid Form T2201 filed with the Canada Revenue Agency (CRA).
- Have an adjusted net income below $37,740 for singles or an adjusted family net income below $49,389 for families.
Ineligibility Factors
Certain individuals are not eligible for the CWB, including:
- Full-time students enrolled for more than 13 weeks in 2024, unless they have dependents.
- Individuals incarcerated for 90 days or more during the year.
- Non-taxpaying diplomats and their family members.
How to Apply for the Enhanced CWB
Eligible individuals can claim the CWB by filing their 2024 income tax return and completing Schedule 6 (Canada Workers Benefit).
For those eligible for the disability supplement, both the basic amount and the supplement should be claimed on the tax return.
Only one spouse can claim the basic amount, but both can file separate Schedule 6 forms for the disability supplement if applicable.
Advanced Payments
Starting in July 2025, eligible Canadians will receive advanced payments equal to 50% of their CWB entitlement, distributed over three quarterly payments based on their 2024 tax return.
This initiative aims to provide timely financial support throughout the year. Notably, individuals who received Advanced Canada Workers Benefit (ACWB) payments in 2024 will automatically qualify for the 2025 payments without the need for reapplication.
Payment Schedule for 2025
The advanced payments for the enhanced CWB will be issued on the following dates:
- July 12, 2025
- October 11, 2025
- January 10, 2026
Action Steps for Eligible Canadians
To ensure receipt of the enhanced CWB, eligible individuals should:
- File 2024 Tax Return: Accurately report income and claim the CWB on Schedule 6.
- Verify Disability Status: Ensure approval for the Disability Tax Credit if applying for the disability supplement.
- Update CRA Information: Maintain current personal information with the CRA to avoid payment delays.
The upcoming increase in the Canada Workers Benefit reflects the government’s commitment to supporting low-income workers across the nation.
By understanding the new benefit amounts, eligibility criteria, and application process, individuals and families can effectively access this financial support starting in mid-2025. Staying informed and proactive in tax filings will ensure timely receipt of these enhanced benefits.
FAQs
What is the Canada Workers Benefit (CWB)?
The CWB is a refundable tax credit designed to assist low-income workers by supplementing their earnings and encouraging workforce participation.
How are the CWB payments distributed?
Eligible individuals receive 50% of their CWB entitlement in advance, distributed over three quarterly payments based on their previous year’s tax return.
How can I apply for the CWB?
To apply for the CWB, file your income tax return for the applicable year and complete Schedule 6 (Canada Workers Benefit).