The pandemic and inflation have at least one thing in common: they affect everyone, but not equally.
For low-income households and people living alone, the rise in the cost of living is particularly trying and is not theoretical. Especially in the supermarket, in front of the meat counter, and at the gas station. Soaring house prices are also causing a lot of distress.
Wages just don’t keep up.
The Minister of Finance, Eric Girard, could not ignore the calls for help which have multiplied for weeks. Especially not 11 months before the election, when he forecasts that inflation will remain at nearly 4% in Quebec next year. The return to normal, at around 2%, is not expected until the end of 2022.
Its mini-budget presented Thursday therefore contained syringes of anti-inflation vaccine. The doses, as it should be, will only be for those who are suffering the most.
They aim to offset “a large part of the rise in the cost of living,” the minister said.
A check to 50% of adults
To help those less fortunate to balance their budgets, Quebec will pay them an exceptional benefit at the end of January (on the 24th or soon after). No less than 3.3 million people will be eligible, nearly half of all adults in the province.
If you are eligible for the solidarity tax credit, watch your mailbox.
People living in a shared apartment will get $ 200, while those living alone will get $ 275. The couples will share $ 400.
The good news is that the payout will happen automatically. No request to make, no paperwork to fill out. This is ideal for preventing free cash from ever going to people in need.
Some will say that this check would have been more useful before Christmas. At a press conference, Minister Girard explained that it would have been difficult for Revenu Québec to “pay three million people” within a month. “By giving it after Christmas, people will be able to judge whether they want to consume or save,” he added in a kind of appeal to wisdom.
Those who are hit hard by inflation may not have the means to save at the moment. But this gift from Quebec can certainly help pay off the traditionally heavy credit card in January.
Help doubled for seniors
Some seniors aged 70 or over will also be entitled to a dose of the Girard vaccine to offset the rising cost of living.
Currently, the less fortunate are entitled to $ 209 per year, through the refundable tax credit for senior support. This assistance will increase to $ 400, or $ 800 per couple.
The tax credit enhancement will increase the disposable income of nearly 709,000 senior citizens. Many live solely on government benefits.
To qualify, a person living alone must report a maximum income of $ 31,575, while a couple must earn a maximum of $ 54,340. The credit begins to decrease as soon as you have income of $ 23,575.
These seniors are also eligible for the January check, for a total of up to $ 675.
Child care expenses
Parents of children who attend an unsubsidized child care center also get a big financial boost. Quebec is now improving the refundable tax credit for child care expenses.
The goal is for the net rate to be “relatively equivalent” to that of a subsidized childcare service, regardless of family income. Given the crying lack of places in childcare centers, this is a measure that improves equity for 385,000 families.
On average, the annual gain per household is estimated at $ 411. But a family with incomes between $ 60,000 and $ 100,000 could see their child care bill drop by $ 1,310.
At most, the reduction can reach $ 4,381. The calculations for Quebec were made with a daily rate of $ 40, for 260 days.
Will daycares take the opportunity to increase their prices, knowing that parents have more money in their pockets and that salary increases would make recruitment easier? That remains to be seen…
Welfare
Eric Girard has also announced the next indexation rate for social assistance programs and the personal income tax system: 2.64%, in 2022. This is the highest rate for 10 years, which is indicative of the inflationary context caused by the pandemic.
Concretely, this means that the monthly social assistance benefit for a single person, for example, will go from $ 708 to $ 726 (annual gain of $ 216).
The maximum amount of the Family Allowance will increase by $ 67 per child to reach $ 2,614.
And on your next tax return, you’ll see that the basic personal amount is $ 16,143, an increase of $ 415 which can represent a maximum tax cut of $ 62.25.
Like the COVID-19 vaccine, Minister Girard’s measures will not be unanimous and they will not eradicate the problem (of inflation) instantly. But they will certainly soften the symptoms in the most vulnerable.