• How is the premium structured?
• Why is the premium structured this way?
• How much revenue does the government expect to collect annually in health premiums?
• Where will this money go? What will it be invested in?
• When does the Ontario Health Premium come into effect?
• Is a different amount being charged in 2004?
• What is the status of the legislation for the Ontario Health Premium?
• Are employers required to start withholding the premium in July, even though the legislation hasn't been passed yet?
• How does the Ontario Health Premium compare to premiums used in other provinces?
• Does the addition of this new premium make Ontario's tax rates less competitive?
• Who will pay the Ontario Health Premium?
• How will this affect families? Is the premium based on combined family income?
• Are seniors required to pay the Ontario Health Premium?
• Will anyone be denied access to health care for failing to pay the Ontario Health Premium?
• Would people have to pay the premium if they don't have to pay Ontario income tax?
• How would individuals who pay their taxes by instalment pay the Ontario Health Premium?
• How would seniors who do not receive employment income pay the premium?
• How would self-employed individuals pay the Ontario Health Premium?

The premium would be based on income. Individuals with income of $20,000 or less would be exempt. Above that, premium levels rise with income.

Please view this chart from the Ministry of Finance to determine the premium level based on taxable income.

More than two million people with modest incomes - about 40 per cent of premium payers - would pay $300 or less a year. Another 2.5 million individuals with higher incomes would pay no more than $600 a year. Individuals with the highest incomes would pay at least three times as much as those with modest incomes.

This government looked at all kinds of options for raising additional revenue in a visible and clearly identifiable way, and felt that an income-based premium would best achieve this goal.

No one with taxable income of $20,000 or less would pay the premium; this means :

• 43% of individual tax filers would not pay the premium; and
• 48% of senior tax filers in Ontario would not pay the premium.

Individuals with taxable income of $21,000 would pay only $5 per month.

Individuals with the highest incomes would pay at least 3 times as much as those with modest incomes. The top premium is $900; whereas, an individual with taxable income of $35,000, for example, would pay $300.

It would be more progressive than other provinces' premium structures.

Ontario has one of the most progressive income tax systems in Canada. This would not change, even when combined with the premium.

Revenue from the premium would contribute $1.6 billion of the $2.2 billion in additional investments in the Ministry of Health and Long-Term Care this year. By the fourth year of the government's Plan for Change, the premium would raise $2.6 billion of the $4.8 billion in additional investments in health care.

Every dollar of the Ontario Health Premium would be invested directly in our health care system.

In 2004-05, revenue from the premium would contribute $1.6 billion of the $2.2 billion in additional investments in the Ministry of Health and Long-Term Care's budget. By 2007-08, the premium would raise $2.6 billion of the $4.8 billion in increased funding to the Ministry of Health and Long-Term Care.

The government has committed to report publicly where the revenue generated by the premium would be allocated. The proposed legislation would require the government to report on the use of the revenue from the premium in the Public Accounts of Ontario each year./p>

As part of the Ministry of Health and Long-Term Care's budget, the health premium will help fund the reduction of wait times for cancer, cardiac, cataract, MRI/CT and joint-replacement services. In addition, the government will :

• Fund an additional 9,000 cataract surgeries each year and nine new MRI/CT sites by 2005-06;
• Increase the number of cardiac procedures by more than 36,000 annually, provide 2,340 additional joint replacements per year, perform 425 extra organ transplants per year and expand dialysis treatments by 529,000 annually by 2007-08; and
• Improve wait-time information by updating the cardiac and cancer radiation registries this year and add the tracking of information on hip- and knee-joint replacements in 2005-06.

The Ontario Health Premium would come into effect for the 2004 tax year. The health premium will begin to be deducted from employee payrolls and pension cheques beginning on July 1^st, 2004.

Yes, individuals would be charged only half the full-year amount in 2004.

Therefore, someone who would pay a premium of $450 in 2005 would only have to pay $225 in 2004.

Bill 106, the Budget Measures Act, 2004 (No. 2) includes proposed amendments to the Income Tax Act to establish the Ontario Health Premium. It was introduced on June 21, 2004, but has not yet received Royal Assent.

Yes. It's common for governments to start implementing income tax changes through withholdings before enabling legislation has been passed into law.

January 1 and July 1 are the two times a year that the Canada Revenue Agency normally adjusts the income tax withholdings deducted by employers (and pension administrators). To delay withholding changes until enabling legislation is passed would impose an additional compliance burden on employers and cash-flow burden on employees, who would have to pay the premium for 2004 over fewer pay periods.

Two other provinces currently have health premiums. In British Columbia, a single individual pays $648 per year, a family of two pays $1,152 and a family of three or more pays $1,296. In Alberta, a single individual pays $528 per year and a family of two or more pays $1,056. While these provinces offer limited premium assistance to residents with low incomes, Ontario would be the only province with a health premium based on income.

A single person in Ontario earning $25,000 a year with no dependents or other deductions would pay less this year in combined provincial and federal income taxes, including the health premium, than in any other province. Ontario's tax rate for the first income bracket - up to about $33,000 a year - remains the lowest in Canada.

In particular, for single individuals earning between $20,000 and $60,000 a year, Ontario would have the lowest combined income taxes and health premiums of any province.

The premium would apply to individuals who are residents of Ontario on the last day of the taxation year. Trusts and non-resident taxpayers would be exempt from the premium.

The amount of the premium payable, if any, would depend on the individual's taxable income for the year. Individuals with taxable incomes under $20,000 would not pay any health premiums.

No. The premium would be based on individual taxable income. Regardless of whether someone is married, divorced, separated or single, the health premium would be charged based only on one's own taxable income.

Therefore, a married couple where each spouse had taxable income of $40,000 a year would pay premiums based on individual taxable income of $40,000 each, as opposed to a single family premium based on their combined taxable income of $80,000.

This also means that the premium would not apply to family members who have little or no income (such as a stay at home spouse, children or other dependants).

In designing the premium, the government decided that it would be more equitable to base liability on income, rather than age. Individuals with taxable income of $20,000 or less would be exempt from paying the premium. This threshold is more generous than those provided in B.C. and Alberta, where senior individuals making more than $19,000 or $18,105, respectively, start paying health premiums.

It is important to note that 48% of senior tax filers in Ontario would not pay the premium.

No resident would be denied access to Ontario's publicly funded health care services for failing to pay the Ontario Health Premium.

Instead, the penalties set out in the Ontario Income Tax Act for non-payment of tax would apply to individuals who don't meet their liability to pay the premium.

Individuals with taxable income over $20,000 would pay the Ontario Health Premium, even if they don't pay any Ontario income tax. Similarly, people with taxable income of $20,000 or less would not pay the premium but may still pay Ontario income tax.

The proposed premium structure is designed to be simple and is not intended to include the many features of Ontario's personal income tax system that affect an individual's income tax liability.

Individuals who remit tax instalments based on their previous years' net tax owing will have the option of adding the premium to their remaining instalments for 2004 and the first two instalments of 2005. Subsequent instalments, which will be based on 2004 net tax owing, would reflect the premium.

Instalment payers who remit tax instalments based on an estimate of net tax owing for the current year will need to adjust their September and December 2004 instalments by adding one-half of their estimated 2004 premium to each instalment payment. Instalment interest may be charged if these instalment payments are insufficient.

Individuals would determine the actual amount of the premium on the Ontario tax form (ON428) when they file their annual returns.

The reminders that the Canada Revenue Agency sends to instalment payers in August will include further details about including the premium in instalments.

Seniors who receive pension income of more than $20,000 a year would have the premium deducted at source along with other taxes. Seniors who receive income from other sources that are not subject to tax withholdings may wish to request an increase in the amount of tax withheld from their pensions by designating an additional amount on the TD1, 2004 Personal Tax Credits Return.

Seniors may also elect to have income tax withheld from Old Age Security (OAS) and Canada Pension Plan (CPP) benefits by sending a completed Form ISP3520, Request for Voluntary Federal Income Tax Deductions, to Human Resources Development Canada (HRDC).

Individuals who have elected to have income tax deducted from OAS or CPP, may wish to increase the amount to include the Ontario Health Premium.

Seniors who do not have taxes deducted at source from pension income, OAS or CPP benefits may be required to pay their taxes by instalments. Individuals who currently do not make instalment payments, but would like to, should call the Canada Revenue Agency at 1-800-959-8281 to receive copies of Form INNS3, Instalment Remittance Form.

Individuals who do not have taxes deducted at source or make instalment payments would pay the premium when they file their tax return.

Self-employed individuals with taxable income of more than $20,000 will be required to pay the Ontario Health Premium.

Individuals who remit tax instalments based on their previous years' net tax owing will have the option of adding the premium to their remaining instalments for 2004 and the first two instalments of 2005. Subsequent instalments, which will be based on 2004 net tax owing, would reflect the premium.

Instalment payers who remit tax instalments based on an estimate of net tax owing for the current year will need to adjust their September and December 2004 instalments by adding one-half of their estimated 2004 premium to each instalment payment. Instalment interest may be charged if these instalment payments are insufficient.

The reminders that the Canada Revenue Agency sends to instalment payers in August will include further details about including the premium in instalments.

Individuals would determine the actual amount of the premium on the Ontario Tax form (ON428) when they file their annual tax returns.

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