Canada lifts tax credit to help newcomers pay daily bills

Many newcomers to Canada will see more money in their pockets this year as the federal government rolls out a stronger support program. The new plan offers added financial help to people with low and modest incomes, including many who recently arrived in the country. The government announced the changes on January 26, 2026.

Under the update, each eligible newcomer could receive up to $417 more this year. Over the next five years, they could also get up to $167 extra each year. The government aims to ease the pressure of rising daily costs, such as food and basic household needs.

What the New Benefit Includes

The government renamed and expanded the existing sales tax credit. It now calls the program the Canada Groceries and Essentials Benefit. The benefit comes as a refundable tax credit, which means people can receive it even if they owe no taxes.

The plan adds a one-time 50 percent increase for this year. Starting in July 2026, the benefit will also rise by 25 percent each year for five years. These increases will add meaningful support for families and individuals who struggle with everyday expenses.

How Much Money People Can Get

A single eligible person can receive up to $950 this year. Previously, the amount stood at $533. Over the following four years, that person can receive up to $700 each year.

Families will also see larger payments. A family of four can receive up to $1,890 this year. In the years ahead, that same family can collect up to $1,400 each year for five years.

Who Qualifies for the Payments

The benefit applies to people aged 19 and older who live in Canada for tax purposes. This group includes most newcomers. To qualify, people must fall below certain income limits. For 2024, a single person without children must earn less than $56,181 in net income. The income limits change based on family size and marital status.

To receive payments starting in July 2026, people must file a tax return for the 2025 tax year. Those who filed their returns on time can expect quarterly payments beginning in July 2026.

Steps for Newcomers to Apply

Newcomers who arrived after the last tax filing season can still apply. They need to complete and send Form RC151 for the year they became a tax resident of Canada. This step allows them to register for and receive future payments.

Why Newcomers Benefit More

Newcomers often earn less during their first years in Canada. International students, new workers, and recent permanent residents usually fall below the income limit. As a result, the program will likely support a higher share of newcomers than people born in Canada.

The benefit focuses on easing the impact of sales taxes. Lower-income households spend more of their income on daily needs, so these taxes hit them harder. The updated program aims to balance that burden and offer steady help.