Currently, families with able-bodied and disabled children can earn an extra $200 and $300 a month, respectively, without the government clawing back income-assistance payments.
The Ministry of Social Development and Social Innovation says it will raise those exemptions to $400 and $500 a month starting Sept. 1.
Under the same plan, the government will allow families to participate in supplemental dental, optical and medical coverage for a year after leaving income assistance.
About 10,600 families are expected to benefit from the program that the ministry hopes will encourage people to pursue work, even if it's part time.
Last month, the government made a separate announcement, saying it would eliminate social services clawbacks for about 3,200 families on income and disability assistance.
"We know that people who can work want to be self sufficient, support their families and contribute to their communities," Social Development Minister Michelle Stilwell said.
"Giving people the opportunity to keep more of what they earn without affecting their assistance will make a real difference for people and help reduce the barriers they face as they transition to employment," she said in a statement.