Amendments have been made to the goods and services tax credit system to make it more responsive to changing family circumstances. GST credit payments have previously been made based on information provided in a taxpayer’s tax return from the year before.
As of this July, changes in family circumstances will affect the calculation of the credit in the following financial quarter. The necessary information must be supplied to the Canada Customs and Revenue Agency to reflect the change.
Some examples where changes can be made include:
- Following the birth of a child, a family receives an additional GST credit amount for that child in the next quarterly payment.
- The GST credit is available to an individual in the next quarterly payment immediately following the individual’s 19th birthday.
- Individuals who get married, or become separated or widowed, have their credits adjusted in the quarter following their change in marital status to ensure that they receive the amount to which they are entitled.
- New residents to Canada are eligible for the credit in the next quarterly payment following their entry into Canada.
The GST credit helps low- and modest-income Canadians offset the costs of paying GST on their purchases. The amount of the GST credit depends on family size and income. The credit amounts for the current benefit year — July 2002 to June 2003 — are $213 per adult and $112 per child, with a supplement of up to $112 for single individuals and single parents. The net family income threshold, above which the credit begins to be phased out, is $27,749.
As part of Ottawa’s five-year $100 billion tax reduction plan, the credit amounts and the net family income threshold are fully indexed to ensure that the amount that people receive keeps pace with inflation.