The Canada Disability Benefit (CDB) is a forthcoming federal initiative designed to provide financial assistance to low-income Canadians with disabilities, aiming to reduce poverty and enhance financial security among eligible individuals.
Payment Schedule
The inaugural payment period for the CDB spans from July 2025 to June 2026. The benefit amount you receive during this period will be determined based on your income reported in your 2024 tax return. To ensure timely receipt of the CDB, it is advisable to apply as soon as the application becomes available in June 2025.
Benefit Amount
The maximum CDB amount is set at $2,400 annually, equating to $200 per month. However, the actual amount you receive depends on several factors, primarily your income level. If your calculated monthly benefit is $20 or less, you will receive a single lump-sum payment for the entire period on the date the first monthly benefit would have been disbursed, rather than separate monthly payments.
Income Considerations
Your benefit amount is influenced by your income from the previous tax year. For instance, payments commencing in July 2025 will be based on your 2024 income. Key income factors affecting the CDB include:
Income Thresholds: The maximum income you can earn before your benefit is reduced. These thresholds vary based on family structure.
Working Income Exemption: A portion of your working income that is excluded when calculating your benefit amount. This exemption allows individuals to earn up to a certain amount without affecting their CDB.
Reduction Rates: The rate at which your benefit decreases if your income exceeds the established thresholds.
Retroactive Payments
In future years, eligible individuals may receive up to 24 months of retroactive payments, regardless of their eligibility status in the month they apply.
Tax Implications
CDB payments are not considered taxable income. This means the benefit will not reduce the amount you receive from other federal programs. However, depending on your province or territory, the CDB may affect the amount received from provincial or territorial benefits.
Preparation Steps
To prepare for the CDB:
File Your Taxes: Ensure you have filed your income tax return for the year preceding the payment period. For the July 2025 to June 2026 period, your 2024 tax return must be filed.
Apply for the Disability Tax Credit (DTC): Approval for the DTC is a prerequisite for receiving the CDB