Basic Income: What federal income supports could be folded into one?

Individual taxpayers can claim a non-refundable credit in respect of the Basic Personal Amount. The value of the credit is calculated by applying the lowest personal income tax rate (15% in 2020) to the Basic Personal Amount. The credit amount is indexed to inflation… In December 2019, the Government announced its intention to increase the Basic Personal Amount to $15,000 by 2023. The increase will be gradually implemented from 2020 to 2023 through annual increases in excess of inflation. The new, increased portion of the credit will be subject to an income test beginning at a level of individual net income equal to the fourth federal tax bracket threshold ($150,473 in 2020), and be fully phased out by the fifth federal bracket threshold ($214,368 in 2020).

Introduced in Budget 2019… Qualifying workers between the ages of 25 and 64 will accumulate a credit balance of $250 per year, up to a lifetime limit of $5,000. The credit balance can then be used to refund up to half the costs of taking a qualifying course or training program. In order to accumulate a Canada Training Credit balance in 2020, a worker must have earnings of $10,100 or more (including maternity or parental leave benefits) and must have net income below the upper limit of the third federal tax bracket ($150,473 in 2020).

A refundable income tax credit (now known as the GST/HST Credit) was established at the time of the introduction of the GST to ensure that low-income families would be better off under the new sales tax regime than under the former federal sales tax. The amount of the credit depends on family composition and income. Specifically, for the period from July 2020 to June 2021, based on net family income reported for the 2019 taxation year:

an adult receives a basic adult credit of $296 per year;

families with children aged 18 and under receive a basic child credit of $155 per year for each child;

single parents can claim, in lieu of the basic child credit, the full basic adult credit of $296 per year for one dependent child;

single parents are eligible for an additional credit of $155 per year in addition to their basic credit, child credits and full basic adult credit for the first dependent child; and

single adults without children are eligible for an additional credit of up to $155 per year (depending on income) in addition to their basic credit.

The value of the credit is reduced for individuals and families with annual incomes over $38,507. Both the credit amounts and the income threshold are adjusted annually for inflation.

The Canada Workers Benefit (CWB) is a refundable tax credit that supplements the earnings of low-income workers. It is generally available to individuals 19 years of age and older not attending school full-time. The refundable credit is equal to 26% of each dollar of earned income in excess of $3,000 to a maximum credit of $1,381 for single individuals without dependants and $2,379 for families (couples and single parents) in 2020. The CWB is phased out at a rate of 12% of each dollar of adjusted net income above thresholds of $13,064 for single individuals without dependants and $17,348 for families in 2020. An additional CWB supplement of up to $713 in 2020 is provided to persons eligible for both the CWB and the Disability Tax Credit. The CWB supplement is phased out at a rate of 12% of each dollar of adjusted net income above a threshold of $24,569 for single individuals without dependants and $37,176 for families in 2020.

How could we combine all four?

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