New tax breaks for low-income workers and seniors announced in Ontario budget | The Canadian News

The Ontario budget released Thursday includes changes to a tax credit aimed at lower-income workers and a new tax break to help seniors age at home.

The Progressive Conservative government said it is proposing changes to the low-income individual and family tax credit (LIFT) and the creation of an Ontario home care tax credit for seniors, both effective this year.

The measures are contingent on the budget being passed after the June 2 election, as the legislature will adjourn immediately upon tabling, becoming the PC Party’s platform.

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The maximum benefit for the non-refundable LIFT credit would increase to $875 from $850, while the income range at which the benefit is reduced would increase.

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For individuals, they will be able to claim at least a portion of the LIFT credit if they have a net income of up to $50,000 (up from $38,500), while for families their net income could be up to $82,500 (up from $68,500).

The benefit would begin to be reduced to a rate of 5% of net earned income (up from 10%) at $32,500 for individuals, up from $30,000.

For families, it would be reduced starting at $65,000, up from $60,000.

Click to play video: 'Ontario Budget Day 2022.

Ontario Budget Day 2022

Ontario Budget Day 2022

The government said about 700,000 more people will be able to benefit from the change, with most of the new beneficiaries having incomes between $38,500 and $50,000. In total, about 1.7 million low-income workers are expected to be eligible for LIFT.

For example, a worker earning $40,000 would not qualify under the current LIFT requirements, but would get about a $515 credit under the proposed change.

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It is expected to be a $400 million revenue loss in 2022-23 and then $320 million in both 2023-24 and 2024-25.

The LIFT credit was first introduced in 2018 as the Ford government sought to dampen some of the anger over the earlier cancellation of a minimum wage increase that would have given low-income earners $15 per hour.

The PCs are also proposing a new refundable tax credit to help seniors with medical expenses.

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“Recipients of Ontario’s new senior home care tax credit would receive up to 25% of their claimable medical expenses up to $6,000, with a maximum credit of $1,500,” the budget states.

It targets low- and moderate-income seniors aging at home.

To qualify, a person must turn 70 during the year or have a spouse or domestic partner who has reached that age.

The amount would be reduced by 5% of the family’s or individual’s net income above $35,000 and would be eliminated entirely above $65,000 at the maximum, the budget notes.

The government said the credit could be claimed in addition to the federal and Ontario non-refundable medical expense credits for the same expenses.

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“The proposed credit would be refundable, supporting low- and moderate-income older families, even if they owe no personal income tax,” the budget states.

According to the government, about 200,000 elderly families would be eligible.

It would cost the province $140 million in 2022-23, $120 million in 2023-24 and $125 million in 2024-25.

Total tax revenues are expected to continue to increase in the coming years.

– With files from Colin D’Mello

2022 Global News, a division of Corus Entertainment Inc.

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