The federal government just announced a new tax credit for eligible personal support workers (PSWs). PSWs are healthcare professionals who provide essential care and support, assisting individuals with the activities of daily living.

PSWs do critical work, and they deserve fair compensation for it. This tax credit is a step in the right direction. It will provide eligible members with some relief, but it’s only temporary, and not a proper substitute for living wages.

CUPE will continue pushing to get real, permanent wage increases for PSWs – but in the meantime, here’s what we know about the new tax credit.

How does it work?

  • The credit is temporary, it will be available for 5 years, from 2025 to 2030.
  • Eligible workers can claim up to 5% of their eligible earnings, to a max of $1,100 per year.
  • It’s a refundable tax credit – so you can still get the money even if you don’t owe anything when you file your taxes.
  • Your employer must confirm your eligibility and how much you can claim. They’ll do this by submitting a specific form to the Canada Revenue Agency (CRA).
  • If you have more than one employer, you’ll need each of them to confirm how much you can claim.
      

Who is eligible?

According to the budget, you must:

  • Be a health care worker who “ordinarily provides one-on-one care and essential support to optimise and maintain another individual’s health, well-being, safety, autonomy, and comfort”.
  • Provide care as “as directed by a regulated health care professional or a provincial community health organization”.
  • Have main duties that include “helping patients with activities of daily living and mobilization”.
  • Work for a hospital, nursing or residential care facility, community care facility for the elderly, a home health care establishment, or “other similar regulated health care establishments”.
  • Have filed your taxes.

However, you are not eligible if you’re working in BC, Newfoundland and Labrador, or the Northwest Territories. Those three jurisdictions signed a different agreement with the government to increase PSW wages.

Does it count if I have the same/a similar job with a different title?

Yes, if you meet the other criteria above. As long as your job duties meet the definition provided, and your employer confirms your eligible earnings, you should be able to claim this credit.

The government has included “related professions” in their deals with BC and Newfoundland and Labrador, which outlined support for Health Care Assistants (HCAs) and Home Support Workers (HSWs).

Statistics Canada and other agencies also classify jobs like HCAs and Continuing Care Assistants (CCAs) together in the same unit.

What are “eligible earnings”?

  • Taxable employment income (wages, salaries, benefits, overtime pay, shift premiums, etc.) earned working at an eligible health care establishment, certified by your employer.
  • Also includes taxable benefits specifically related to your employment as a PSW, and any similar tax-exempt income you may have earned on a reserve.
  • You cannot count any income you made from:
    • non-PSW jobs
    • unregulated facilities
    • private, cash-based care without a “proper employment structure”
    • self-employment that’s not tied to regulated PSW duties
    • working as a PSW or related occupation in BC, Newfoundland and Labrador, or the Northwest Territories

Quick math: if you made $18,000 in eligible earnings, you could receive a $900 tax credit; if you made $22,000 or more, you could receive the maximum of $1,100.

Why aren’t people in BC, NL, or NWT eligible?

These three regions have already signed agreements with the federal government to receive funding to increase the wages of designated personal support workers, based on an announcement in Budget 2023.

The federal government allocated $1.48 billion for the tax credit in Budget 2025 – but most of this money was pulled from the funds that had been set aside in Budget 2023.  Since most of the provinces and territories didn’t sign an agreement to increase PSW wages, most of the money allocated in Budget 2023 went unspent.

This tax credit is a way for the federal government to temporarily boost incomes for personal support workers without having to negotiate an agreement with the applicable region. It means that eligible workers in most of Canada will receive the temporary tax credit instead of the permanent wage increases that were negotiated by BC, NL, and NWT.