Working Income Tax Benefit Advance Payment Application form and Information Sheet

Prepared for the:
Public Affairs Branch
Canada Revenue Agency
FINAL REPORT
September 2007
POR# 056-07
Contract #4655889227

Prepared by:
Sage Research Corporation

Le rapport complet en français sera fourni sur demande.

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Canada Revenue Agency
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EXECUTIVE SUMMARY

In the 2007 federal Budget, the Government of Canada announced the Working Income Tax Benefit (WITB). The WITB is a new refundable tax credit for low-income Canadians with some working income, and it is intended to provide them with an added incentive to remain in the workforce. It will become effective beginning with the 2007 tax year.

The WITB will become effective in the 2007 tax year: eligible recipients will claim that year's refundable tax credit on their T1 tax return (there will be no opportunity for advance payments). For 2008 and future tax years, qualified individuals will be able to apply for an advance payment of one-half their estimated annual entitlements. To receive advance payment of the WITB, a person completes an application form giving their anticipated income for the year. The final amount of the credit to which they are entitled is confirmed when they file their T1 return.

The purpose of the research was to test the draft Information Sheet and application form that would be used by those applying for advance payment of their WITB. The results will be used to help identify revisions to these materials.

A total of nine focus groups were conducted between June 12 and July 17, 2007, in Toronto (4 groups), Vancouver (2 groups) and Montréal (1 English and 2 French groups). Four of the focus groups were with people currently in a spousal relationship, and five groups were with people not in a spousal relationship. All participants had at least $3,000 in personal working income. Their maximum income was $12,000 for singles without dependants, $20,000 for singles with dependants, and $20,000 for people in a spousal relationship. These income ranges approximate the income ranges for which people would qualify to receive the WITB. The Vancouver groups included representation of new Canadians (in Canada less than 3 years). Participants in all focus groups were given either a “single person” or a “couples” scenario to use as a basis for reviewing the information sheet and completing the application form.

Application Form

Most participants generally found the WITB advance payment application form straightforward in its design and easy to complete. No major issues with the design or content of the form emerged in the focus groups.

One issue associated with some degree of inaccuracy in completing an item on the form involved the instruction to Enter the date your current marital status began in the case of an applicant who is divorced. Some participants were confused about how to interpret “marital status”, because they thought they were supposed to enter the date that the scenario marriage had begun, rather than the date of the divorce. These participants tended to leave the date field blank.

Information Sheet

Participants had a generally positive perception of the WITB Information Sheet in terms of clarity and design/layout, although there were issues with certain aspects of the document -- most notably involving the amount of the maximum WITB advance payment, and certain eligibility criteria.

• Maximum WITB advance payment: When asked the maximum amount of the WITB advance payment, somewhat more than half the participants gave the full amount of the WITB, rather than the 50% figure that represents the maximum amount of the advance payment. Two sorts of suggestions were made by participants to improve communication of the maximum amount of advance payment:
  • Revise the beginning sections of the Information Sheet to make it more clear to the reader which information is about the WITB in general, and which information specifically applies to the WITB advance payments.
  • Better link and integrate the section What is the WITB? with the later section What are the WITB advance payments? by, for example, incorporating the latter into the former, or by moving What are the WITB advance payments? to come right after What is the WITB?
• Eligibility criteria: Results suggested consideration of the following sorts of changes to the section, Are you eligible for the WITB?:
  • Consider increasing the visual prominence of the heading, You are not eligible for the WITB if, in order to reduce the likelihood of interpreting the subsequent bullet points as directly associated with the section heading, Are you eligible for the WITB?
  • Consider integ rating the two bullet points pertaining to residency, as some participants were confused as to the interpretation of one or the other of these bullet points, and how the two bullet points relate to each other.
  • Consider revising the communication of the impact of attending school full-time for more then three months, as some participants were unsure how to apply the rule in the case of an applicant with an eligible dependant. For example, some participants suggested explicitly describing both how attending school full-time might apply to a person without an eligible dependant, and how it might apply to a person with an eligible dependant.