Low Income Cut off in Canada: Table and Criteria

The low-income cut-off in Canada (LICO) table represents the poverty line in Canada’s urban areas, with a population of half a million or more. In other words, if your income is below LICO, you are considered poor.

Statistics Canada updates the LICO table every year due to inflation. Most Canadian immigration programs require applicants to prove their financial ability to support themselves or family members in case of sponsorship. For assessment, Immigration Refugees and Citizenship Canada (IRCC) uses the Low Income Cut-Off (LICO).

The estimates for the low-income cut-off in Canada in 2023 are not official figures but are projected from the prior year using an inflation rate of 4.4%. We will update the actual figures once we receive the official report from government sources.

What is LICO?

LICO is an income threshold updated by the Canadian Government annually concerning inflation. It shows the amount of income based on the family size, below which a family will likely devote a larger share of its income to the necessities of food, shelter, and clothing than the average family.

LICO Sponsorship Exemption

In family class sponsorships, sponsors are not required to meet LICO if they sponsor the following members:

• Spouse, common-law, or conjugal partner who has no family members
• Spouse, common-law or conjugal partner who has dependent children who have no dependent children of their own
• A child who has no children of their own

LICO must be met in the following situations

• Sponsoring parents or grandparents (LICO + 30%, in the three preceding years)
• Super visa (12-month LICO)
• Federal Skilled Worker Program (6-month LICO )
• Federal Skilled Trades Program (6-month LICO )
• Sponsoring any other family members or relatives, except those who are exempted (see above) (12-month LICO )
• Start-up Visa Program (6-month LICO)
• Only spouses or common-law partners may help to meet LICO requirements by co-signing the financial undertaking.

Uses of LICO in Canada

LICO is useful both for settlement funds and the necessary annual income. Here are some examples:

• Federal Skilled Worker Class (FSWC) – The 6-month LICO for settlement funds
• Federal Skilled Trades Class (FSTC) – The 6-month LICO for settlement funds
• Sponsoring family members other than spouses, parents, or children – The 12-month LICO for the minimum necessary income
• Start-up visa – The 6-month Lico for settlement funds.

The Immigration Refugees and Citizenship Canada (IRCC) uses the low-income Cut Off (LICO) for assessment.

Also, Statistics Canada uses Lico’s and other low-income measures to generate various statistics.

What are Settlement funds?

Settlement funds refer to the amount of money you can bring to Canada when you land as a newcomer.

What is an annual income?

Annual income is the amount of income you earn in one fiscal year. Your annual income includes everything from your yearly Salary to bonuses, commissions earned

Settlement funds Vs. Annual income

To verify financial admissibility, an immigration officer may consider your skills, work experience, educational credentials, and assets. Nonetheless, settlement funds are one of the main options to prove your ability to be independent.

Of course, settlement funds refer to the amount of money you can bring to Canada when you land as a newcomer. Immigration authorities use the LICO table to evaluate the sufficiency of settlement funds.

Settlement Funds Express Entry

You cannot rely on settlement funds when you sponsor a family member via a family reunification option. Since you are financially sponsoring your loved ones, you usually need to show a steady income above the low-income cut-off in Canada.

Therefore, your income becomes more important than the money you have in your bank account.

Low Income Cut Off in Canada (LICO) table 2023

The LICO table 2023 is a point of reference for sponsorship income. In addition, you may use the LICO 2023 table for settlement funds and the necessary annual income. Here are some examples.

• Federal Skilled Worker Class (FSWC) – The 6-month LICO for settlement funds
• Federal Skilled Trades Class (FSTC) – The 6-month LICO for settlement funds
• Sponsoring family members other than spouses, parents, or children – The 12-month LICO for the minimum necessary income
• Start-up visa – The 6-month LICO for settlement funds

Of course, these are just some examples. Additional federal or provincial immigration options may also consider LICO 2023 to assess an applicant’s financial position.

Consequently, in some immigration options, like the Federal Self-employed class, LICO could help even though settlement funds are not an explicit assessment factor.

LICO Table 2023

The table below shows LICO for 2023. As you can see, the LICO changes based on the household number. The low-income cut-off table reflects the 12-month and 6-month LICO from 2018 to 2023. Of course, this is an effort to show you the changes in LICO over the years.

Minimum Income for LICO

To sponsor family members, you must prove that you can meet the minimum necessary income requirement, meaning that you have sufficient income to support all the people for whom you will be financially responsible.

The income requirement varies depending on the number of family members being cared for in Canada, the number of family members being sponsored, and whether the sponsor lives in Canada or Quebec.

What is the “Minimum Necessary Income” or MNI?

To qualify for some family sponsorship programs, sponsors must have a minimum income level to support themselves, members of their family unit, and those they wish to sponsor.

Immigration, Refugees and Citizenship Canada uses “Minimum Necessary Income” or MNI thresholds to assess the sponsor’s financial ability to support their family members.

Family sponsorship applicants will only be considered eligible to sponsor their family members if they can meet the NMI requirements for their family size.

The size of the family unit is established based on who is currently being supported by the sponsor in Canada and those they are planning to sponsor. To calculate a family unit for the low-income cut-off in Canada, you would include:

• yourself
• your spouse or partner
• your dependent children
• your spouse’s or partner’s dependent children
• any other person you previously sponsored in the past and for whom you’re still financially responsible
• the parents and grandparents you want to sponsor
• your parents and grandparents’ spouse, partner, and dependent children
• You must also include dependent children, spouses, partners, and separated spouses who will not be coming to Canada with your parents or grandparents.

MNI for Parents and Grandparents Program Sponsorship

For parent and grandparent sponsorship, the sponsor in Canada will only be eligible if they exceed the MNI for three consecutive taxation years (except in the province of Quebec).

This requirement ensures that sponsors who bring their parents and grandparents to Canada are ready for the financial responsibility that often comes with caring for elderly family members.

Sponsors under the Parent And Grandparent Sponsorship must meet the Minimum Necessary Income (MNI) outlined in the chart below. The MNI figures below are Low-Income Cut-Off (LICO) figures, plus 30 percent.

MNI for Family Sponsorship in Quebec

Sponsors living in the province of Quebec must meet different income requirements. Sponsors are presumed capable of fulfilling an undertaking if, over the past 12 months, they have had gross income from Canadian sources equal to the total of the income required.

Gross annual income required of the sponsor

The gross annual income required increases by $4,500 for each additional person under 18 years of age. Number of persons 18 years of age or over the number of persons under 18 years gross annual income required of the sponsor

The gross annual income required increases by $3,121 for each additional person under 18 years of age. Number of persons 18 years of age or over the number of persons under 18 years gross annual income required of the sponsor

The gross annual income required increases by $2,342 for each additional person under 18 years of age and by $8,389 for each additional person 18 years or older.

LICO across Canada Provinces

Ontario had the most significant number of individuals living in low-income households. Quebec and British Columbia followed with 576 thousand and 280 thousand, respectively.