$375 Shelter Allowance Tax Questions

Canada Revenue Agency Tax Treatment of $375 Shelter Allowance

Persons with Disabilities Benefits (PWD) benefits may include a $375 shelter allowance. When an individual who qualifies for PWD benefits resides in the family home, the family can recover expenses by charging the individual $375 for room and board. This $375 per month is not considered taxable income to the family as payments of this nature are minimal enough to be considered an offset of expenses and not a source of business or employment income.

Similarly, families employing a live-in caregiver under the foreign live-in caregiver program may charge the live-in caregiver the current BC allowable $325 room and board charge under this program. This $325 per month is not considered taxable income to the family as payments of this nature are minimal enough to be considered an offset of expenses and not a source of business or employment income.

Live-in caregivers are employed and are subject to the normal payroll withholding (tax, CPP, EI) requirements of the Canada Revenue Agency. This means that a payroll account should be opened with the CRA. In situations where room and board are provided without charge, this amount should be estimated and included in the income of the caregiver. The $325 room and board allowance under the foreign live-in caregiver program may be deducted from the net salary paid (after payroll tax deductions) but it does not reduce the gross salary amount to be reported annually on the T4.

Information provided by Kelly Lohn, CA, Lohn Caulder LLP www.lohncaulder.com November 2009