Two New Budget 2025 Measures Explained
1. Personal Support Workers Tax Credit (PSWTC)
- A new refundable credit beginning in 2026, running through to 2030, specifically for Personal Support Workers (PSWs) employed by eligible health-care establishments. (canada.ca)
- Value: Lesser of $1,100 or 5% of eligible remuneration in the tax year. (canada.ca)
- Helps support thousands of PSWs, especially those in low-wage roles, working in long-term care, home care, or supporting vulnerable populations.
2. Medical Expense Tax Credit Limitation for Overlap with Home Accessibility Tax Credit
- Starting the 2026 taxation year, an expense claimed under the Medical Expense Tax Credit (METC) cannot also be claimed under the Home Accessibility Tax Credit (HATC). (canada.ca)
- Avoids duplication; ensures clearer distinction between medical vs. home access modifications.
Who Gains, Who Should Take Action
| Beneficiaries | How They Benefit | What They Should Do Now |
|---|---|---|
| PSWs in eligible health-care establishments | Can claim refund even if low income; tax relief kicks in faster | Track your total eligible PSW earnings, ensure your employer qualifies you; file accurately as refund in your 2026 return |
| Seniors or individuals renovating homes for medical need | No double-claiming across METC and HATC; avoid audit risk | Before 2026, plan to allocate expenses wisely: if a renovation qualifies under HATC, don’t claim under METC and vice versa; keep all receipts and professional reports |
Example Case
Tom installs railings and ramps in his home to reduce fall risk: since these are part of a home renovation for mobility, he would likely use HATC. If he also has medical devices in his home (say, specialized bed or equipment), those would fit under METC. Under the new rule, he must choose which tax credit to claim for overlapping cost—e.g., a device that’s both medical and helps him access the dwelling would not be double-claimed.
Meanwhile, Lisa, a PSW working at a home-care establishment, earns $24,000 from eligible PSW work. She’s eligible for PSWTC of 5% × $24,000 = $1,200, but capped at $1,100. So she’ll claim $1,100 refundable credit for 2026.
Implications and Advice
- These measures highlight continuing government focus on affordable care, long-term care workforce support, and tax fairness.
- Ensure tax-time documentation is well organized: for PSWs, retain employment statements; for HATC/METC, professional certifications may matter.
- Consult CRA or a tax advisor about eligibility criteria and precise definitions.