Sonia Dolar
Sonia Dolar

Caregiver Tax Credit – Changes in 2017

At some point in your life you may take the responsibility of helping someone in your own family or a friend’s family with the role of caregiver or advice in this capacity. Seniors are the fastest growing group. There is some tax relief for caregiver taxpayers under the Federal Budget for Tax Caregiver Tax Credit in 2017 and going forward.

For those that are in the role of a caregiver to a relative or friend, aging parents or dependent children, it can be a challenge to manage effectively and with enough energy for the ‘to do’ list. Whether it be shopping for, picking up prescriptions, cooking meals, cutting the grass, driving to medical appointments, paying bills and advocating for them, repairing things around the home or finding their keys. The biggest thing change in my life was finding the right resource to help and being sandwiched between my children and managing my elder parental care all at the same time.

As a tail end baby boomer, I have come across this in the capacity of caregiver for my uncle, assisting him with regular daily tasks, getting to his appointments and treatments and helping him manage his cancer condition as well as co-coordinating through the other health care systems, homecare, hospice coverage and out of pocket items.  I have also assisted managing with other chronic conditions and treatments, other challenges, getting personal support workers, as well as applying for disability tax credits and other treatments. There are so many things to know who to contact for care or advice in the nature of a permanent scenario.
Individuals providing care and support – Caregiver Credit 2017

The 2017 budget streamlined and simplified the 3 credits (The Infirm Dependent Amount, Family Caregiver Amount and Family Caregiver Amount ) into the Caregiver  Credit Amount

  1. $6,883 For infirm family dependents who are parent/grandparents, brother/sisters,  aunts/ uncles, nieces, nephew, adult children of the claimant of or the claimant’s spouse or common law partner.
  2. $2,150 limit in respect of an  infirm dependent  spouse/common law partner, infirm child under age 18 at the end of the tax year for whom the individual claims the spouse or common law partner amount, or infirm child under 18 eligible as a dependent credit
    • Reduced dollar for dollar by dependants net income over $16,163 in 2017
    • Dependents need not live with caregiver, 2017 figures.
    • The Ontario proposed budget has the Ontario Caregiver Tax Credit

Sally Lives in North Bay and takes care of her sister, Jane who has been diagnosed with chronic pain and has not been able to work.  She takes her to her medical appointments, buys her groceries, and helps with utilities, and cooks for her. Jane receives social assistance of $15,000 so Sally under the new rules in 2017 receives the non refundable tax credit of $6,883.

Claiming an infirm

If you make a claim for infirm you will have to give a description of the nature of the physical or mental infirmity to Canada Revenue Agency.  Your information included in your return will help CRA assess if you are eligible to claim a dependent as infirm.

The claimant,  the person that is assuming the tax credits now is different than previous, no longer need to live with the inform.  The change is that the caregiver tax credit will no longer be available in respect of non infirm seniors who reside with their adult children.

Check to see if the dependent also has the disability tax credit available to them as there may be more planning available for transferring of credits.
Always seek the advice of your qualified tax professional to see what would be optimal and correct for your personal situation.


Jackie Porter
Jackie Porter

Are you retiring soon?


Let’s discuss a scenario that faces a high number of retirees and soon-to-be-retirees all over the country. You have spent years saving for your retirement and you have made smart decisions about using the power of RRSPs to accumulate a significant nest egg.

But now you’re unsure about how best to get income from your investment portfolio as your retirement day comes ever closer. In terms of your RRSP investments, as a decision must be made before the last day of the year during which the account holder turns 71.

The most common practice is to let RRSP investments grow untouched until the income is needed to meet retirement lifestyle expenses. Hopefully you’re in a position where you have other investments and income streams to meet your retirement income needs so that you can continue to let your RRSP savings grow tax-deferred for as long as possible.

When the day finally arrives that you need to begin withdrawing income from your RRSP investments, there are a number of different options. Here are some of the choices available to you.

Transfer Your Funds to an RRIF You might consider transferring the funds from your RRSP to a Registered Retirement Income Fund, otherwise known as an RRIF. This will allow you to determine individually how much you are able to withdraw every year (the Canada Revenue Agency sets a minimum amount). There is no set maximum amount which you can withdraw, which means that unless you’re careful you might find yourself burning through your retirement funds too quickly.

Purchase an Annuity If you decide to buy an annuity, you’ll be guaranteed an income that lasts either through to age 90 or for life depending on the type you select. A joint life annuity provides income for both parties for life, while a single life provides funds for the dur of a single life. If a recipient of this income dies sooner than expected, there can be provisions in place to guarantee continued payments for a given period of time.

This annuity can guarantee income with no requirements of investment management over time. That being said, you will be unable to make income adjustments or large withdrawals with this method.

Take a Lump Sum One option is to withdraw the entirety of your RRSP savings or a large percentage of it all at once. This is not an ideal choice as the income will be fully taxed in the year the money is withdrawn.

Combine Your Options One thing that’s important to remember is that you aren’t required to choose only one of the options listed above. You can mix and match options based on your individual needs. For example, you might decide to use an annuity to meet the daily costs of your life and then use a RRIF to provide available cash for emergencies, investments and trips.

Whatever you decide, you should consult the services of a professional financial adviser to ensure that your RRSP funds are used effectively and responsibly to ensure that they work for you in the long-term.

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