Understanding Adjusted Family Net Income and Eligible Dependants or Spouse

Many government benefits—including the Canada Workers Benefit (CWB), GST/HST credit, and Canada Child Benefit—use your Adjusted Family Net Income to determine how much support you’re entitled to receive. But this term often creates confusion, especially when combined with the rules around dependants and spousal income.

This matters when you are filing your return jointly, deciding who should claim a benefit, or estimating whether your household qualifies for income-tested credits. A clear understanding of how your family's income and dependants affect your eligibility can lead to more accurate tax filing and prevent missed benefits.

Let’s walk through how Adjusted Family Net Income is calculated, who counts as an eligible dependant or spouse, and how these definitions impact your overall financial plan.

What Is Adjusted Family Net Income?

Adjusted Family Net Income (AFNI) is your combined family income, minus specific deductions. It’s used by the CRA to assess eligibility for a range of income-tested programs.

It includes the net income (Line 23600 on your return) of:

• You (the taxpayer), and

• Your spouse or common-law partner, if applicable

AFNI does not include income from your children or other dependants, but your family structure will still influence how benefits are calculated.

Adjusted Net Income Is Calculated As:

• Net income (Line 23600), minus

• Universal Child Care Benefit (UCCB) repayments, minus

• Registered Disability Savings Plan (RDSP) income, if applicable

AFNI Inclusions and Exclusions

The higher your AFNI, the more likely you are to see reduced or phased-out benefits. If your income changes mid-year, the following year’s benefits may not align until you update your information.

Who Counts as a Spouse or Common-Law Partner?

For CRA purposes, you are considered to have a spouse or common-law partner if:

• You are legally married, or

• You have lived with someone in a conjugal relationship for 12 consecutive months, or

• You are co-parents of a child by birth or adoption

If your status changed during the year—due to separation, marriage, or common-law union—you must update the CRA, as it affects benefit calculations immediately.

Who Counts as an Eligible Dependant?

An eligible dependant is someone who relies on you for support and meets the CRA’s criteria. While the rules differ slightly for various benefits, the CWB defines dependants for family eligibility as:

• Children under 19 who live with you and rely on you for care

• Spouses or common-law partners who meet the work and residency requirements

• In some cases, relatives with disabilities may count, if you are their primary caregiver and they meet the dependency threshold

Dependants do not include adult roommates, financially independent adult children, or extended family unless they are financially reliant on you and live with you full-time.

Why It Matters for Tax Benefits

Many credits and benefits—such as the CWB, GST/HST credit, and climate action incentive—are income-tested based on family structure. If you are in a couple, your combined net income will determine your eligibility.

Here’s why this matters:

• You may lose or reduce benefits if your partner’s income is higher than expected

• You may gain benefits if you are a single parent with modest income and eligible dependants

• Incorrectly reporting your status can result in overpayment and repayment demands

At Optimize, we help ensure that your AFNI is reported correctly and your dependants or spouse are listed accurately, so that your return triggers the right credits at the right time.