September 23, 2025

Summary:  The Canada Revenue Agency (CRA) income ceilings are income levels it suggests organizations hosting CVITP clinics use as part of the eligibility criteria for selecting which individuals should receive the free CVITP service.  The CRA has not changed these suggested ceilings since at least the 2019 tax season.  But the cost of living increased significantly between 2018 (the tax year for the 2019 tax season) and 2024 (the tax year for the 2025 tax season).  As a result, official poverty lines across the country have crept up.

Comparing a sample of seven Canadian cities’ official poverty lines for 2018 and 2024 to the CRA’s suggested income ceilings, I show that for host organizations with capacity constraints wishing to target their CVITP service to the poor while using the CRA’s income ceilings for client selection, the risk of serving small non-poor households has shrunk but the risk of denying service to large poor households has grown over time.

Due to ongoing inflation, the official poverty lines for 2025 will likely rise again.  If the CRA’s income ceilings for client selection do not change for the 2026 tax season, the risks of serving small non-poor households will fall further and of denying service to large poor households will grow still further.  The CRA needs to raise its suggested income ceilings for the 2026 tax season to ensure that all households living in poverty are considered by host organizations to be eligible to receive free CVITP services.

The Canada Revenue Agency (CRA) income ceilings are income levels it suggests organizations hosting CVITP clinics use as part of the eligibility criteria for selecting which individuals should receive the free CVITP service.

Back in 2020, I pointed out that these income ceilings were well above the poverty lines for almost all family sizes.

Below I reproduce the chart I used in 2020 to illustrate this.  The CVITP income ceilings that the CRA suggested be used for families of different sizes in the 2019 tax return filing season are represented by the red line.  (Income is on the horizontal axis and family size is on the vertical axis.)  The chart also shows a sample of seven of the 53 poverty lines for 2018.[i] 

All the poverty lines lie to the left of the red line except for those for Calgary and Vancouver where families have five or six members.  The gap to the left of the red line shows the incomes of clients who lie above the official poverty line in these seven cities but fall below the CRA’s income ceiling.

Where host organizations followed the CRA’s suggestion for income ceilings, many households on modest incomes but not living in poverty were eligible to receive this free service.

At the time, I felt this was a problem.

Because many host organizations had various kinds of capacity constraints – possibly staff, volunteers, space and/or equipment – they were unable to serve all Canadian residents living in poverty.  Therefore, it could reasonably be assumed that host organizations would want to be highly selective, targeting the most vulnerable as they were the least able to afford to pay for this service.  But as most host organizations seemed to use the CRA’s suggested income ceilings, many households living above the poverty line were also getting this free service.

As late as 2023, I showed that in every province across Canada, the need if not the demand for this service vastly exceeded the CVITP’s capacity.  This meant that many individuals living below the poverty line who wanted this free service could have been excluded from receiving it.

What has happened most recently?

For the 2025 tax season, the CRA’s suggested income ceilings remain the same as they were for the 2019 tax season.

Household size	total household income
1 person	$35,000
2 people	$45,000
3 people	$47,500
4 people	$50,000
5 people	$52,500
More than 5 people	$52,500 + $2,500 for each additional person

But the cost of living increased significantly between 2018 (the tax year for the 2019 tax season) and 2024 (the tax year for the 2025 tax season).  As a result, the poverty lines across the country crept up.

During the 2025 return preparation season, income tax and benefit returns are being prepared for clients’ 2024 income.  Below, I show Statistics Canada’s official poverty lines in 2024 for the same sample of seven regions and compare them with the CRA’s suggested income ceilings for the 2025 tax return preparation season.

When comparing this chart with for the 2019 tax season which I reproduced above, one can see a clear difference with respect to the red line, which once again represents the CRA’s suggested income ceilings.   The poverty lines for the same seven cities lie much closer to the red line on the left side.  They are also much further from the red line on the right side than was the case in 2018.

The smaller gap to the left of the red line means the range of incomes above the poverty lines which lie below the CVITP income ceilings is much narrower.  If host organizations have continued to use the CRA’s income ceilings, this means that fewer small households living above the poverty line have been receiving this free service than was the case in the past. 

And there are more poverty lines crossing over the red line where the number of family members is three, four, five or six.

The larger gap to the right of the red line means the range of incomes below the poverty lines which lie above the CRA income ceilings is much greater.  If host organizations have continued to use CRA’s income ceilings, this could mean that more large households living below the poverty line have been denied this free service than was the case in the past.

The official poverty lines for 2025 (which will be published in early 2026 by Statistics Canada) will increase again due to inflation.  If the CRA suggests the same income ceilings for the 2026 season, the gaps to the left of the red line will shrink and to the right of the red line will grow further.  For host organizations using these same income ceilings, the risk of serving small non-poor households will be reduced but of denying service to large poor households will increase even more.

The problem could be almost the opposite of what it was back in 2019.  Then, the CRA income ceilings were too generous, allowing for many small, non-poor households to be considered eligible.  Now it could be that the CRA income ceilings are too strict, resulting in many large, poor households being turned away.

At this point, some readers may wish to skip expanding the next section entitled `”Market income vs disposable income” as it is somewhat technical and does not change my conclusion.  Its main purpose is to provide further clarity and precision around the idea of using CRA income ceilings to select clients when priority is being given to serving those living in poverty.

Market income vs disposable income

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Up to this point, I have been assuming that the poverty lines and CVITP income ceilings are comparable.  Strictly speaking, they employ two different concepts of income so what I have been doing is a bit like comparing apples with oranges.

Many CVITP host organizations identify which households they will serve by comparing the CRA’s income ceilings with each potential client’s income.  Host organizations will generally only serve those households whose income from all their T slips lies below the CRA’s income ceilings.  Economists often refer to this kind of income as the before-tax or market income.  Henceforth, I will refer to it as market income.

However, the official poverty line uses the concept of after-tax and transfers or disposable income.  For simplicity’s sake, I will refer to it hereafter as disposable income.   In other words, disposable income is the total income (including government transfers, such as the Canada Child Benefit, the GST/HST credit, Old Age Security (OAS) and Guaranteed Income Supplement (GIS) as well as provincial and territorial credits and benefits) after deducting for: income tax and several non-discretionary expenditures including Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) contributions, Employment Insurance (EI) and Registered Pension Plan (RPP) contributions, union dues, child care expenses, spousal support payments paid, public health insurance premiums, and direct medical expenses including private insurance premiums.

Many CVITP clients are unemployed and living on social assistance, so they are not paying income tax, EI, CPP or QPP and RPP contributions or union dues.  So, their disposable income will be made up of their social assistance income together with the federal and provincial or territorial benefits they receive from filing their returns.

Similarly, many CVITP clients are seniors living on OAS Security, GIS and possibly income from CPP as well as RPP.  Unless this combined income is high enough, they will not be paying any income tax.  So, their disposable income will be made up of their combined income together with the federal and provincial or territorial benefits they receive from filing their returns.

For both above groups, their disposable income will thus be somewhat higher than their market income.  So, when determining whether they are living in poverty, ideally one should take their disposable income, not their market income, and compare it to the official poverty line.

How is this relevant to a discussion of client selection and poverty?

Host organizations compare a potential client’s income with the CRA’s suggested income ceilings to determine if they are eligible to qualify for CVITP service – both concepts use market income.

When determining if a household is living in poverty, host organizations need to compare their disposable income with the official poverty line – both concepts use disposable income.

If host organizations want to limit their CVITP service to those who need it the most – those living below the poverty line – then there are two risks they must manage when using the CRA’s income ceilings:

1. Excluding small households whose disposable income lies above the poverty line but below the CRA’s income ceilings
2. including large households whose disposable income lies below the poverty line but above the CRA’s income ceilings

Presently, the CRA ceilings and the poverty lines cross each other.

For households of two people or less, the CRA ceilings are to the right of the poverty lines.

The CRA income ceilings should be close enough to the right of the poverty lines that when using market income for selection, there are few non-poor households that qualify for the free CVITP service.  But the CRA income ceilings should also be far enough to the right of the poverty lines that using market income for selection, all poor households qualify for the service.

For small households, the gap between the poverty line and the CRA income ceiling has narrowed over the past five years.  So, host organizations using the CRA ceilings are now serving relatively fewer non-poor.  But there is a risk that if the gap closes more, host organizations will be denying service to some poor small households.

For households of three people or more, the CRA ceilings are generally to the left of the poverty lines.

The fact that the CRA ceiling lies to the left of the poverty lines seems, at first glance, to suggest that host organizations using the ceiling are denying service to large households living in poverty.  But this is not always the case.  This is because large poor households receive significantly larger federal and provincial benefits than small poor households as they include children under 18 years of age.  These benefits make the disposable incomes of these households relatively larger than those of smaller households.

For these larger households, the CRA income ceilings should be close enough to the left of the poverty lines that when using market income for selection, there are few non-poor households that qualify for the free CVITP service.  But the CRA income ceilings should also be far enough to the left of the poverty lines that using market income for selection, all poor households qualify for the service.

Over the past five years, the gap to the left of the CRA ceilings has narrowed and to the right has widened substantially.  And more of the larger households lie to the right of the CRA ceilings.  This means that, on the one hand, host organizations are serving fewer small non-poor households; this is good, given that host organizations’ resources are stretched.  On the other hand, host organizations may also be excluding more large poor households.

What needs to be done now?

In my annual assessment of how well the CVITP is serving those living in poverty across Canada, I assume that all the individuals assisted through the CVITP live below the poverty line.  This may increasingly be true for small households.  But we may also increasingly be excluding larger households living in poverty from receiving this free service.

The official poverty lines for 2025 (which will be published in early 2026 by Statistics Canada) will increase again due to inflation.  In the 2026 tax season, most host organizations will likely continue to use the CRA’s suggested income ceilings to determine eligibility to receive the CVITP service.  Many host organizations will, once again, want to limit this free service to those most in need – those living in poverty – due to the capacity constraints they will face in responding to high demand.  The CRA should help these organizations by increasing its suggested income ceilings from their current levels.  This will reduce the risk these organizations face in denying the CVITP service to poor households, especially those with three or more members.

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[i] The reader who is unsure why I refer to more than one official poverty line for Canada may wish to consult this primer on the official poverty line(s).