Budget 2026 delivers key modification in Canada’s Caregiver Credit

The federal government’s Budget 2026 delivers a key modification in Canada’s Caregiver Credit.

The Present Canada Caregiver Credit

A (currently) non-refundable tax credit providing financial assistance to those caring for dependants with physical or mental impairments.

• The credit is limited to those caring for dependants with physical or mental impairments.
• The credit can be claimed for more than one dependant under age 18. However, the amount may only be claimed once for each dependant.

What modifications were made for Budget 2026?

• The Canada Caregiver Credit is now set to be fully refundable. This allows increased financial assistance to low-income caregivers.
• Now, the credit goes directly into caregivers’ bank accounts, even if caregivers have no or minimal taxable income.
• Under the current Canada Caregiver Credit, caregivers whose incomes are too low to pay tax do not qualify.
• Caregivers will receive up to $1,260 per year, beginning in the 2027 tax year.
• This change is expected to boost 15,000 caregivers out of poverty.

How many caregivers are impacted?

• An estimated 585,000 caregivers are directly affected by these changes.
• Additionally, about 180,000 caregivers are now eligible for the benefit who had previously been exempt due to low incomes.

Over 50% of Canadian women are caregivers. About 25% provide unpaid assistance to adults with long-term disabilities or medical conditions.

What about young caregivers?

According to the Young Caregivers Association:

• Young caregivers care for loved ones suffering from a chronic illness, disability, mental health concern or substance abuse.
• Canada has an estimated total of 1.25 million young caregivers. That number excludes Northern Canada and caregivers under 15 years-old, leaving out a large number of young caregivers.
• In Ontario, young caregivers provide an average of 14-27 hours of care per week.

Research shows that young caregivers are more prone to anxiety, depression, stress, social isolation and low self-esteem. Many young caregivers are also falling behind in school.

Modifications with the Canada Caregiver Credit will allow low-income young caregivers to receive increased benefits.

Important note: To receive the credit, young caregivers must file an annual income tax return with the CRA.

Further reading