Similar to several other developed nations, Canada has many social assistance programs in place to help its people. Such programs are not for everyone, especially not for high earning people. These programs are specifically designed for people who are bottom-earners.

Anyone thinking of applying for social or financial assistance must be familiar with LICOs. LICO is an abbreviation of Low-Income-Cut-Off. As the name suggests, LICOs in Canada signify income thresholds that the Canadian government uses to determine whether someone is eligible for financial support or not.

In this article, I will discuss LICOs and related topics such as Low-Income-Cut-Off table, Low-Income-Cut-Off (LICO) update, etc. If you are a low income earner living in Canada who doesn’t have too many earning opportunities, this article is for you. So, read on.

But first,

LICOs and Their Types

Statistics Canada defines LICOs as income levels that vary annually based on inflation. They are the representatives of a family that would spend more than average share on basic necessities such as food, shelter and clothing. When below this LICO poverty threshold, the risk of being poor and having a tough life increases significantly.

There are two main types of LICOs. Before-tax LICOs account for gross incomes before taxes are drawn, and after-tax LICOs include taxes paid and are a more fine-tuned measurement of disposable income.

The Purposes of LICOs

LICOs in Canada serve many purposes. Here’s what you need to know about LICO Canada 2024. The most sought after benefits for low-income people in Canada are subsidized housing, childcare subsidies, and tax breaks. And truth be told, not just Canada but in every part of the world, poor people have these needs that often remain unmet. But Canada fulfills these needs through various programs. LICOs are tools for deciding program eligibility. Think of them as gateways – reaching that LICO requirement will open doors to necessary help.

LICOs offer invaluable insights to statisticians and social scientists. LICO thresholds are used by researchers and policymakers to identify poverty trends and assess the effectiveness of social programs. This guarantees responsive support systems to real needs.

LICOs are great means to assess financial vulnerability. It’s because LICOs act like a financial compass. Identifying your income against the appropriate LICO will help you determine how vulnerable you are and your prospects for budgeting in a strategic manner. Hence, LICOs are only important at policymaking level, but also at individual budget-making level.

Limitations of LICOs

LICOs are tools, and they are not perfect tools. They have limitations. Your understanding of LICO Canada 2024 or LICO table Canada can never be complete unless you understand their limitations. The biggest limitation of LICOs and especially LICO Canada 2024 is that 

LICOs are a snapshot of thresholds of income at a particular juncture. They do not pick the changing realities of families dealing with shifting situations such as illness, job losses, or sudden childcare needs . A family appears to be above the LICO in terms of income, but still might be tight on money due to unexpected charges, or financial responsibilities of a term-life insurance. In other words, a family might be in a dire need of financial support, but due to stringent LICO requirements, they may not get support. The Low Income Cut-Off table or the LICO table Canada doesn’t register such scenarios.

Another problem with the Low Income Cut-Off table is that LICOs factor in housing and tax costs in a region-agnostic way. LICOs completely neglect regional variations in essential expenses like food, transportation, and childcare. A family meeting the LICO in a rural area might struggle in a more expensive city, highlighting the need for flexible considerations beyond standardized thresholds.

The LICO Table Canada

The LICO table, or the Low-Income Cut-Offs table, is presented by Statistics Canada that determines income limits starting from the point where a family is likely to spend a much larger portion of their income on food and shelter as compared to the average family. It fundamentally represents the amount of income a family earns that classifies it as “low-income.”

To understand LICO Canada 2024, one needs fresh data. However, the LICO table Canada is not updated at this moment. Its reference period ranges from 1976 to 2021. Whether LICO Canada 2024 table releases with the same before and after-tax cut-offs is yet to be seen. Whenever Low Income Cut-Off (LICO) Update on Statistics Canada’s official website, we will share the update with our readers.

Final Words on LICOs

LICO is a useful mechanism to evaluate the poverty trends and eligibility of support programs. Nevertheless, tackling the problems faced by vulnerable groups is crucial, and unfortunately, LICO Canada 2024 does not address those problems. If the Low Income Cut-Off (LICO) Update encompasses multidimensional poverty measures, community approaches, and an intersectional lens, that will make sure policies and programs are reaching those who need them the most.

So, in the interim period, while we await for the revelations of LICO Canada 2024, in the meantime, we can enlighten ourselves about the shortcomings of LICOs, and our attempts to look into other ways to address the holes that LICOs don’t cover can lead to a more inclusive and equal society.


What defines a middle-class income in Canada?

As of 2021, Statistics Canada reports the median after-tax income for Canadian families and singles as $68,400. The classification of a middle-class income is subject to variations based on factors like location, family size, and expenses.

How is a middle-class salary determined in Canada?

The Organization for Economic Cooperation and Development (OECD) characterizes a middle-class individual as someone earning between 75% and 200% of the median household income after taxes. According to recent Statistics Canada data, this range translates to approximately $50,000 to $125,000 in Canada.

Is there a specified minimum income to live in Canada?

Canada does not have an official minimum income requirement, as it hinges on variables such as location and living expenses. Nevertheless, the Low-Income Cut-Off (LICO) is often used as a benchmark for gauging poverty rates.

What constitutes the average 1% salary in Canada for the year 2020?

Based on Statistics Canada’s data, the average total income for Canadians in the top 1% was $512,000 in 2020. Individuals earning at least $253,900 are categorized within the top 1% income group.

Comments are closed.