La Cible

22 lacible | Octobre 2016 FEATURE ARTICLE file their income taxes for 2016, 4.3 million of them will benefit from the most recent reduction in the health contribution. Beginning in 2016, the reduction will be applied progressively to income brackets above $18,570. For incomes under $41,265, the contribution will be reduced by $50, and for those earning between $41,265 and $134,095, it will be reduced by $25. Beginning in 2017, people residing in Québec at the end of the year who earn $41,265 or less will not pay any health contribution at all. The highest earners, whose incomes exceed $134,095, will enjoy savings of up to $200. In 2018, the contribution will be abolished for all taxpayers. Exempted individuals Adults in the following situations will be completely exonerated from paying the contribution for the 2016 tax year: • Taxpayers whose net income on line 275 of the Québec tax return is less than $18,570. • Adults whose household income is equal to or less than the exemption amount granted for the purposes of calculating the public drug insurance plan premium (RAMQ); this threshold depends on their family situation on December 31, 2016. 3 • People aged 65 or over who receive 94% or more ($8,695 or more) of the maximum Guaranteed I n co m e S u p p l e m e n t (G I S ) , exc l u d i n g t h e additional amount as of July 2016; the threshold will be lower for couples. SLIMMING DOWN THE HEALTH CONTRIBUTION On March 17, Québec Finance Minister Carlos Leitão's provincial budget announced a reduction in the amount of the health contribution beginning in 2016, a year earlier than planned in his last budget. The "health tax" will be gradually abolished over the course of three years. Instituted by the Charest government on July 1, 2010, as a temporary measure to replenish health care coffers, the contribution generated a lot of ink, especially because it was the same for everyone, wealthy and less wealthy alike. In an article published in June 2016, two researchers concluded that the level tax measure actually contravened Bill 112, the anti-poverty and social exclusion law. 1 Rather than abolish it as promised in her election campaign, Pauline Marois changed it in 2013, making the amount payable based on net personal income and allowing 3.1 million taxpayers to pay less than they had in 2012. When Québec taxpayers Josée Jeffrey M. Fisc., F.Pl. Focus Retraite & Fiscalité Inc. 1 Dorothée BOCCANFUSO and Marie-Eve YERGEAU, "La contribution santé épargne-t-elle les pauvres du Québec ?", Revue Interventions économiques, June 29, 2016; online: . 2 Income brackets are subject to automatic annual indexing on January 1 of the target years. 3 Single person whose net income does not exceed $18,570; single person with a dependent child whose net income does not exceed $23,880 (for a couple, $27,055); single person with two or more dependent children whose income threshold does not exceed $27,005 (for a couple, $29,985). Net adult income (2016) 2 Health contribution From To 2016 before budget 2016 after budget 2017 – $18,570 – – – $18,570 $41,265 $0.01 to $100.00 $0.01 to $50.00 – $41,265 $134,095 $100.01 to $200.00 $50.01 to $175.00 $0.01 to $70.00 $134,095 – $200.01 to $1,000.00 $175.01 to $1,000.00 $70.01 to $800.00 Source: Minister of Finance Illustration of gradual reduction of the health contribution

• Cover