When the prices of housing and the cost of living escalated to the point where they were out of reach for the average Canadian, the federal government introduced an unprecedented one-time lump sum relief package: the $500 Canada Housing Benefit. Targeted at low-income tenants, the program assisted families and individuals living in financial hardship in paying rent when times were hard. In this article today, we are going to take you through the whole history you need to know of the benefit, who was covered and how to get covered, when and how payments were made, and what it all means going forward.

What was the $500 Canada Housing Benefit exactly?

The $500 Canada Housing Benefit was a tax-free lump sum payment introduced by the Canadian government as a stimulus to the economy to counterbalance the burden of moderate-income renters. While inflation itself was driving up the cost of living in most of the provinces, the benefit was included in a comprehensive federal plan to keep Canadians in residence with money.
Beaten to the punch by the Canada Revenue Agency (CRA), the payment wasn’t made under a new federal or provincial rent benefit program — i.e., you weren’t required to already be getting some other type of housing subsidy to qualify. It was a standalone payment intended to fill the gap for other Canadians who need help with rent now.

Who Was Eligible?

The government introduced stringent qualifications so that the payment ended up in the hands of the individual who truly needed it. To qualify for the $500 relief, the applicant should fulfill all of the following:

1. Income Requirements

Your 2021 adjusted net income was to be less than the following amounts:

• $20,000 or less as a single person with no dependents.
• Less than $35,000 as a family.

2. Rent-to-Income Ratio

You had to have paid at least 30% of your 2021 adjusted net income in rent on your main home in 2022.

3. Age and Residence

• You had to have been 15 or older as of December 1, 2022.
• You had to have been a resident of Canada in 2022 for taxation purposes.

4. Tax Filing

You would have filed your 2021 income tax return because that information was utilized in determining your eligibility.

5. Rent Proof

The applicants would have

• Provided the address of the rental house.
• Provided the amount paid in rent.
• Provided their name and the landlord’s phone number.
  Amazingly enough, you were not necessarily receiving the Canada Housing Benefit to qualify — this $500 was a federal top-up, paid to more people than many housing support schemes.

Step-by-Step Guide to Applying

Even though the deadline for sending in the applications has passed, it is worthwhile to understand from the applicants how it was processed in case they have to work on further housing support programs later.

When Were Applications Received?

• December 12, 2022 – March 31, 2023.

How Did You Get an Opportunity to Apply?

There were three ways through which you could apply:

1. CRA My Account
   The quickest method. If you were already registered for a CRA account, you should be able to log in and apply online.
2. CRA Web Form
   Others without CRA, my account logins were presented with a web form on the Canada.ca website itself.
3. By Phone
   You can also apply by calling 1-800-282-8079 and completing it over the phone with a CRA representative.

What Information Was Required?

Having the following information available will make it simpler to complete the application:

• The total rent you paid on your main residence in 2022.
• The length of time you rented that property.
• The address of the rental property.
• The landlord’s name and phone number.
  The CRA asked applicants to retain supporting documents (such as rent receipts, lease agreements, or e-transfers) for at least six years, in case they were selected for audit or examination.

Payment Information: What to Expect

How was the $500 distributed?

After approval, the applicants got their $500 by

• Direct Deposit—normally within 5 to 7 business days.
• Mailed Check—within 10 to 12 business days.
  As a means of getting it to you faster, the CRA recommended that you sign up for direct deposit through your CRA My Account or bank.

Do You Need to Pay Tax on It?

No. The $500 payment was non-taxable, or not taxable income, and didn’t require that you count it when you file your taxes.

Will It Affect Other Benefits?

Good news — the lump sum payment did not impact other federal income-tested benefits, including:

• Canada Workers Benefit (CWB)
• Canada Child Benefit (CCB)
• GST/HST Credit
• Guaranteed Income Supplement (GIS)
  But if you were receiving provincial or territorial aid, you may have been handled differently. Every province is different, so you can try calling your region to see what else you can discover.

FAQs

1. Is the $500 Canada Housing Benefit still on the table?
   No. The deadline for filing was March 31, 2023. But we always hope that treats like these will come again someday because the program was such a hit.
2. Will I still qualify if I did not file my 2021 return?
   No, regretfully. You needed to report for 2021. If you had not reported, you would not have qualified in any respect.
3. I’ve been overpaid in error. What can I do?
   If you have been mistakenly overpaid the $500 (e.g., you failed the income or rent test), they will ask you to repay it. They will send you a notice to tell you how to repay.
4. Can I claim for someone else?
   No. The claimant must fill out the benefit application form. Third-party applications were only permitted if the applicant had a representative authorized by CRA.
5. I did not receive my check or deposit. What can I do?
   If you had not received your payment, you could call the CRA general enquiries line. They would find the payment or reissue it if it was pending.

Last Word

The $500 Canada Housing Benefit paid off for deserving Canadians because the rent just kept going up. While the disbursement was short-lived, it made it unmistakable that, finally, the government had heard the cries of the mounting housing crisis and was prepared to step in with emergency relief.
For most renters, it arrived in the form of a brief but adequate respite. In the future, look for targeted home assistance programs — federal, provincial, or municipal — if you are low-income and discover you do have rent burdens.
Having your taxes up to date, good record keeping on rental paid, and direct deposit established with CRA will place you in a position where you can be eligible for financial help when and if it is again offered.