Reporting social assistance income
Pre-test question
Sorry, that is incorrect
Although these payments are not taxable, they must be reported on a tax return because they help determine an individual’s eligibility for certain benefits such as the guaranteed income supplement (GIS), the goods and services tax/harmonized sales tax (GST/HST) credit and the Canada child benefit (CCB).
That is correct
Although these payments are not taxable, they must be reported on a tax return because they help determine an individual’s eligibility for certain benefits such as the guaranteed income supplement (GIS), the goods and services tax/harmonized sales tax (GST/HST) credit and the Canada child benefit (CCB).
Instructions
- Open the tax software
- Review the Background information and Required slips (tax slips, receipts, etc.)
- Provide all required information for the appropriate sections of the tax software
- Once completed, compare your results with the solution provided
- Afterwards, refer to Key points of the tax software and the Takeaway points
Background information
Situation
Nathan and Sophia are common-law partners who live together and received social assistance payments in 2025. Nathan also has an interest payment to report.
| Category | Information |
|---|---|
| Name | Nathan Kearns |
| Social insurance number (SIN) | 000 000 000 |
| Address | 123 Main Street City, Province X0X 0X0 |
| Date of birth (DOB) | September 21, 1989 |
| Marital status | Common-law with: |
Required slips
T5007 – Statement of Benefits (for Nathan)
Text version of the above image
T5007 – Statement of benefits
Protected B
Recipient’s name and address:
Last name: Kearns
First name: Nathan
123 Main Street
City, Province X0X 0X0
Box 11: Social assistance payments or provincial or territorial supplements: 10,476.00
Box 12: Social insurance number: 000 000 000
T5 – Statement of Investment Income (for Nathan)
Text version of the above image
T5 – Statement of Investment Income
Protected B
Recipient’s name and address:
Kearns, Nathan
123 Main Street
City, Province X0X 0X0
Payer’s name and address:
Bank 1
456 Main Street
City, Province X0X 0X0
Box 13: Interest from Canadian sources: 12.00
T5007 – Statement of Benefits (for Sophia)
Text version of the above image
T5007 – Statement of Benefits
Protected B
Recipient’s name and address:
Last name: Kearns
First name: Sophia
123 Main Street
City, Province X0X 0X0
Box 11: Social assistance payments or provincial or territorial supplements: 9,120.00
Box 12: Social insurance number: 000 000 000
Review your results
Solution to Reporting social assistance income.
Key points of the tax software
Important note
To access complete instructions on the various steps of entering data into the software, click on the title of each section below.
Nathan's interview
Social assistance payments (T5007)
- Click Interview setup in the left-side menu
- Tick the box next to Social assistance, worker’s compensation (T5007/RL-5) in the Employment and other benefits section
- Click Social assistance, worker’s compensation in the left-side menu
- Click the + sign next to T5007 – Workers’ compensation benefits, social assistance, etc. (federal lines 14400, 14500, 14600)
- Enter the amounts from the tax slip
- Select Yes for the question Did you live with your spouse or common-law partner when you received the social assistance benefits?
- Select Family head from the Select the person whose name appears on the slip drop-down menu
Interest and other investment income (T5)
- Click Interest, investment income and carrying charges in the left-side menu
- Click the + sign next to T5 – Investment income in the Income from a T-Slip section
- Enter the amounts from the tax slip
Sophia's interview
Social assistance payments (T5007)
- Repeat the same steps you did for Nathan except:
- Select Spouse of family head from the Select the person whose name appears on the slip drop-down menu
Takeaway points
- Social assistance payments are non-taxable. They are entered as income on the tax return but are subsequently deducted
- For common-law or married couples who are living together and receiving social assistance payments, the individual with the higher net income must report all of the payments
- the net income calculation does not include the social assistance payments (line 14500), child care expenses (line 21400) or social benefit payments (line 23500)
- since Nathan’s net income before the social assistance payments is $12 and Sophia’s is $0, the software automatically reports each individual’s social assistance payments on Nathan’s tax return
- if both individuals have the same net income, the amounts are reported on the tax return for the individual whose name is on the tax slip
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