Canada Fed Deposits are direct deposits made by the Canada Revenue Agency (CRA). This agency functions under the supervision of the Federal Government of Canada.
CRA looks after the administration of taxation rules and laws for the Government of Canada and most of the territories and provinces.
The direct deposits are associated with either –
- Canada Child Benefit (CCB)
- Goods and Services Tax or Harmonized Sales Tax (GST/HST)
- Canada Workers Benefit (CWB)
- Child Disability Benefit (CDB)
- Climate Action Incentive Payment (CAIP)
Receiving the Canada federal deposit indicates that you are qualified for one or more of the federal benefits mentioned above. There are various types of Government bank deposits and federal payment is one of those.
You can utilize the amount received for the betterment of your financial situation and enhance your quality of life. But, one must bear in mind that it’s essential to be diligent about record-keeping and tax savings.
The Canada Federal Deposit is not taxable. To receive the abovementioned benefits you should file your tax returns yearly even if you don’t come under taxable income slab.
1. History of Canada Fed Deposit Program
There are many government programs to assist and support Canadians with low income to strengthen their financial conditions and improve the overall economic conditions of the country.
One such program is the Canada Fed Deposit Program which began in the year 1957 intending to help people who were financially unstable in Canada.
The Canada Fed Deposit is distinct from that of provincial or territorial benefits which are only available to people residing in a particular territory. Every Canadian having citizenship is eligible for this federal payment irrespective of which province or territory they reside in.
2. Programs Under Canada Fed Deposits
2.1. Canada Child Benefit (CCB)
This benefit is non-taxable monthly funding provided by the Canada Revenue Agency (CRA) under the surveillance of the Government to raise a child without compromising on its necessities. It is specifically given to families who qualify under low-income to middle-income.
2.1.1. Key Factors
- In case you are fostering a child, you are eligible to receive Children’s Special Allowances (CSA) and when you receive CSA you will not be entitled to get CCB.
- The same rule is applicable when you are living and caring for a child in your family under any program of the Government.
- In no situation is anyone entitled to receive both benefits together, you may either get CSA or CCB.
- You are entitled to receive this benefit if you have children under the age of 18 and you reside with them.
- The amount that you receive under CCB is calculated based on number of children you have or you are living with.
- You can apply for Canada Child Benefits as soon as the child is born or in other scenarios when the child comes to live with you or is fully under your custody.
- The families that are eligible for CCB can also qualify for various provincial and territorial benefits depending on the territory they reside in.
- The amount keeps on decreasing as the age of the child keeps growing.
2.1.2. Eligibility to Receive Canada Child Benefit (CCB)
You must fulfil the following requirements:
- Live with a child who is younger than 18 years old
- The child’s upbringing and care fall primarily on your shoulders.
- Should have citizenship in Canada
- Your family’s net income
- You or your spouse or common-law partner must be a Canadian citizen or a permanent resident Trilliuma protected person or a temporary resident having a valid permit or a person registered under the Indian Act or is eligible to do so
2.2. Goods and Services Tax or Harmonized Sales Tax (GST/HST)
This tax credit is levied by the federal government and is given quarterly to individuals or families whose earnings range from low to moderate.
2.2.1. Key Factors
Goods and Services Tax or Harmonized Sales Tax is a benefit that was introduced to eliminate double taxation on a single good or service. In simple language, GST/ HST ensures that tax is paid only once on any commodity or service.
This tax credit helps to compensate workers’ work for some amount paid as sales taxes by a few Canadian citizens in the form of GST/ HST annually.
The only differentiating factor between GST and HST is the province or territory where you reside. GST is applied all over the nation whereas HST is applied on the provisional portion of the sales tax.
You are eligible for various provincial or territorial programmes (as laid down by the government) under the GST/HST deposit depending on your place of residence.
The calculation of GST credit or HST credit is dependent on your previous year’s net income. This implies that you will receive payment for 2022 in the year 2023.
2.2.2 Eligibility for Goods and Services Tax or Harmonized Sales Tax (GST/ HST)
- Should hold Canadian Citizenship
- Your age should be 19 years old or above
- Should or have had a spouse or common-law partner
- You are or were a parent who lives or had lived with a child
2.3. Canada Workers Benefit (CWB)
The benefit was established in the year 2019. This recent income tax benefit was substituted for the Working Income Tax Benefit (WITB). It is through this benefit that you can claim tax deductions or credits.
2.3.1. Key Factors
Under Canada, Workers Benefit you qualify to get a refundable tax credit. This implies that deposit that you receive under Canada Workers Benefit adds up to your tax slab calculation.
CWB was introduced to safeguard the interest of working individuals or families who earn less income.
The utmost important factor for receiving Canada Worker Benefit is that you should file your income tax returns from time to time without any errors.
There are two parts to this benefit: the Canada Workers Benefit and the other Child Disability Benefit. The calculation of this benefit is done considering both these factors.
2.3.2. Eligibility to Receive Canada Worker’s Benefit (CWB)
The following are the criteria you must fulfill to receive CWB:
- You should be employed and earn a salary/ income
- Should be above 19 years of age
- Should be living in Canada for the whole taxation year
2.3.3. Disqualification under Canada Worker Benefit (CWB)
You will be disqualified from receiving any benefits under CWB if you:
- are a full-time student for more than 13 weeks or
- were in prison or correctional facility for 90 days or above or
- are not paying taxes despite having citizenship of Canada as you are employed by some other country, for example, you are an ambassador.
2.3.4. Canada Worker Benefit – Disability Supplement
This benefit is also known as the Canada Disability Benefit (CDB). It was recently introduced by the Government to reduce poverty in Canada. If you are eligible to receive CWB then you are most likely to receive CDB as well.
The CDB can be attained by people having low to medium income who are citizens of Canada with ages ranging between 18 years to 64 years old and who have any disability.
The maximum payment that you are eligible to receive under the Child Disability Benefit is around $720 per year per person. Also, this benefit can be reduced if your net income or adjusted family income crosses a certain threshold.
To be eligible to receive CDB you must qualify for the Disability Tax Credit (DTC) and have a CRA-approved Form T2201, Disability Tax Credit Certificate.
2.3.5. Disability Tax Credit (DTC)
This is a non-refundable credit that is given to people with some disability or the family members who stay with them.
The disability tax credit is a reduction in the tax amount that is paid by disabled people or their family members. To receive DTC you should be doctor certified that you have intense and long-term impairment.
2.4. Child Disability Benefit (CDB)
This child disability benefits amount is exclusively for families bearing children with a disability and who is a minor i.e. below the age of 18 years.
2.4.1. Key Factors
The deposit that you receive under this benefit is not taxable. You are likely to receive a monthly payment for the welfare of your disabled child. This deposit is usually paid together with Canada Child Benefit.
The amount that you receive under the Child Disability Benefit depends on the number of disabled children staying with you against your adjusted family net income. Also, marital status is taken into consideration when calculating the CDB.
A medical practitioner (i.e. a doctor) must determine and certify that the child is suffering from a significantly severe physical or mental disability or is handicapped which is long-term only then will you get CDB.
2.4.2. Eligibility to Receive Child Disability Benefit (CDB)
- You are qualified to get Canada Child Benefit (CCB)
- Your Children are entitled to a Disability Tax Credit (DTC)
- There is no need to register for the Child Disability Benefit (CDB) if your kid is eligible for the Direct Tax Credit (DTC) and you are currently receiving Canada Child Benefit (CCB) for the child. It will be paid automatically to you.
2.5. Climate Action Incentive Payment (CAIP)
The Climate Action Incentive Payment is a non-taxable amount given by the Government to help individuals and families offset the cost of federal pollution pricing.
2.5.1. Key Factors
This Canada Fed deposit is a quarterly payment. It is available to individuals and families in Alberta, Saskatchewan, Manitoba, and Ontario.
With effect from 1st July 2023 individuals and families residing in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island are also eligible to receive CAIP.
The CAIP comprises a basic amount and a 10% additional amount for individuals and families residing in small and rural communities.
The amount you receive under the Climate Action Incentive Payment depends on the territory or province of your residence and the number of members are there in your family.
2.5.2. Eligibility for Receiving Climate Action Incentive Payment (CAIP)
- Must be a citizen of Canada for income tax purposes.
- Should be residing at the abovementioned location
- Should be a major person i.e. 19 years old or above
- Must have or have had a spouse or common-law partner
- You are or were a parent who lives or had lived with a child
3. Common Eligibility for Receiving Canada Fed Deposits
The following are common criteria that you must fulfill to receive Canada Fed Payments. However, each program requires additional criteria to be fulfilled as well.
It’s of primary importance that you understand how and why you qualify to receive these payments to maximize your benefits.
- Must be a person having citizenship of Canada
- Have a Bank Account in Canada
- Should not be a minor
- Must have filed tax returns
- Should be registered with the CRA to receive direct deposit.
4. Tips on How to Utilise the Canada Fed Deposits
One of the best ways to use the Canada Fed Payments is by depositing these payments in a high-interest savings account in a financial institution.
Some of which are Simplii HISA, EQ Bank Savings Plus, KOHO Earn Interest, Scotiabank Momentum PLUS, Neo Financial Motive Financial, and Motusbank. With this approach, you can be sure that the money you invest will yield good returns.
Make a Registered Education Savings Plan (RESP) for your child. This is regarded as one of the most effective savings strategies done by many parents to secure the future of their children. Under RESP the contribution made by you is matched by the Government of Canada.
You can also invest the amount received under the Canada Fed Department in some investment account irrespective of whether it is registered or unregistered.
Investing in the amounts received is a good idea but you should not forget why was the money given to you in the first place. And so you should always try to stabilize your financial status and meet the necessities of life.
One of the major plus points about Canada Fed Deposit is that you can spend it without worrying about taxes, unlike other Government Deposits.
These benefit payments can be utilized to repay your debts, personal loans or buy any commodity as you will.
5. Frequently Asked Questions
5.1. How come I received a Canada Fed Deposit?
The Canada Fed deposit payment that you have received from the Government of Canada is either subjected to the Canada Child Benefit (CCB), Goods and Services Tax or Harmonized Sales Tax Credit (GST/HST), or Canada Workers Benefit (CWB).
5.2. How can I verify my Canada Fed Deposit?
First and foremost visit and verify from your CRA My Account to see which fed payments are you entitled to. You can also connect with the CRA by contacting the number given on their official website.
5.3. Are Canada Fed Deposits subject to tax/ Is Canada Fed Taxable?
As mentioned in the article, the amount of deposit that you receive under CCB and GST/HST is not taxable. However, the payment that you receive under CWB is liable for taxation i.e. you need to pay taxes on a certain ratio of the amount received.
5.4. What does Canada’s FPT deposit mean?
FPT stands for Federal Provincial Territorial deposit and if it appears in your bank statement or records it means it has been deposited by the Canadian Government under some program for which you are eligible.
5.5. What to do when I am eligible for Canada Fed Deposits but still haven’t received the same?
You are suggested to wait for a minimum of 5 to 10 working days in such situations. And still, if you haven’t received the payment then you need to contact the agency directly.
5.6. What to do in case of a change in eligibility w.r.t. Canada Fed Deposits?
In case there are any changes with regard to the eligibility factor for which you receive any deposit under the federal government deposits you should inform the appropriate authority which is Canada Revenue Agency.
Canada Revenue Agency calculates and monitors constantly your eligibility factors.
5.7. When will I receive Canada Fed Deposits/ Canada Fed Payment Dates?
Since the Fed deposit has different programs payment dates for each one do differ. And so should expect to receive each deposit on different dates which can also be found on the official website of the Canada Revenue Agency.
Hope this article can provide you with a broad picture of what Canada Fed Deposits are all about. When the Government deposits money in your bank account you should not panic rather check under which program are you eligible to utilise the benefit payments.
It is of vital importance that before you spend this money deposited by the Canada Revenue Agency is legally yours and you qualify for the same. If not then you may land up in serious trouble for a few hundred dollars.
Any fund that is deposited in your bank account should be verified by you whether it comes under government benefits or not, it’s your moral responsibility to do so.
There are many benefits that the Canadian Government provides under various programs. You need to be vigilant about filing your annual income tax return and ensure which benefit are you entitled to.