More and more Canadians are concerned about their financial health as uncertainty surrounding the COVID-19 pandemic continues. As unemployment numbers climb, you may be worrying about how to cover your immediate expenses like paying your mortgage or rent, utilities or even buying groceries.
Thankfully the federal government took strong action with an expansive $82-billion aid package designed to provide immediate financial relief and restore confidence. To build on this support, the B.C. government also introduced a $5 billion aid package to help meet the specific needs of British Columbians.
Let’s take a look at a fictitious family to better understand what these changes could mean for an average family:
Lin and Theo have two children, ages 7 and 9. Lin is a freelance art director who has no income coming in (having lost her clients due to the pandemic), while Theo, who works for a large retailer in Vancouver, has taken a 25% pay cut, bringing his total take home pay to about $75,000. While schools and daycares are closed due to COVID-19, he and Lin are caring for their children at home.
Here’s what the aid package could mean for you—and for them:
Much needed income support
If you’ve lost your job in recent weeks due to COVID-19, you’re not alone. In fact, almost two-thirds of Canadians say they have already lost work or expect to soon, according to a recent survey. Here are two income benefits that may apply to you.
#1. Canada Emergency Response Benefit
The details: The Canada Emergency Response Benefit (CERB) provides $2,000 a month for up to four months (between March 15 and October 3) to anyone who’s lost 100% of their income. (Note that while you’ll get the full amount now, it will be counted as income when you file your taxes next year.) Find out if you meet the requirements by applying here.
What it means: This one can get a bit confusing, but let’s use our hypothetical family to make sense of it all. As a freelancer, Lin wouldn’t typically qualify for EI. But because the CERB is an entirely different benefit, Lin will receive $2,000 a month until October 3. When this program originally launched, it was for people who were earning no income. As of April 15th though, these rules have changed so that people can still benefit if they earn less than $1,000 per month. That means Lin could still take some earnings (up to $1,000 a month) and still be eligible for CERB benefits. After October 3, if she’s still not working, she can then apply for EI.
Already receiving EI because you’re unemployed or have taken parental leave? Continue collecting these benefits. If EI ends before October 3 and you’re still not working because of COVID-19, you can then apply for CERB. If you’ve already applied for EI due to COVID-10, you won’t need to reapply for CERB either. The government will automatically evaluate which program is right for you.
#2 B.C. Emergency Benefit for Workers
The details: The provincial government is also providing a one-time, tax-free payment of $1,000 to British Columbians whose ability to work has been affected by the COVID-19 outbreak. You can apply for this now through the provincial government website here, and according to the website, can expect the payment within 10 business days of your application approval.
What it means: The good news is, this doesn’t seem to be an either-or situation—the program is designed to compliment support provided by the federal government (EI or CERB).
The government is also increasing existing benefits to lighten the financial load for families and individuals. The good news for these ones, there are no applications required for you to receive them. The government will automatically assess you for these.
#3 Special Goods and Services Tax credit
The details: The existing GST/HST credit is a tax-free quarterly payment that helps families with low or moderate-income offset all or part of the GST and HST that they pay. This special one-time payment to those who qualify will be paid in early May, doubling the maximum GST/HST amount for the 2019-220 tax year.
What it means: The average boost to income will be close to $400 for individuals, and almost $600 for couples.
For a married/common-law couple like Lin and Theo, their adjusted family net income is over the $55,509 amount required to qualify, so they are not eligible. If you normally receive the GST/HST credit, there is no need to apply for this increase. It will be automatically mailed to you or deposited into your bank account if you’re enrolled for direct deposit.
#4 Enhanced Canada Child Benefit
The details: The Canada Child Benefit (CCB) is a tax-free monthly payment to eligible families to help with the cost of raising children under age 18. The government is providing a one-time increase to the existing benefit to help families who may have extra childcare costs as a result of COVID-19.
What it means: For Canadians with children under age 18 who qualify, the benefit means an extra $300 per child for their May payment. (A good reason to file your taxes early!) If you already get the CCB, there’s no need to reapply for the special increase.
#5 Climate Action Tax Credit boost
The details: The B.C. Climate Action Tax Credit (CATC) is a quarterly, non-taxable benefit that helps offset the impact of carbon taxes paid by individuals or families. The province is increasing this credit for July 2020. How much you receive depends on the size of your family and your adjusted family net income.
What it means: This enhanced payment boosts the regular climate action tax credit payment of up to $112.50 per family of four and up to $43.50 per adult if you qualify.
In Theo and Lin’s case, their adjusted family net income is above the $60,689 threshold for a married or common-law couple with two children, so they won’t qualify for this benefit.
Other ways to help your cash flow
If cash flow is a problem right now, you may be able to defer some of your payments (or take advantage of payment assistance) for a few months to reduce some financial stress in the short term. Here’s a look at some of the ways you can do that.
#6 Defer your mortgage payment
The details: Yes, you really can defer your mortgage payments if you’re experiencing financial hardship. In fact, you may already have this option written into the fine print of your mortgage. But if not, Canada’s largest banks recently made it official.
What it means for you: If you’re concerned you’ll miss a payment, talk to your mortgage provider to learn what your options are.
On top of government support, Vancity has introduced a loan deferral program that defers payments on mortgages and other loans, including credit cards.
Plus, as a Vancity member, if you’re affected by COVID-19, you won’t pay extra penalties when you need financial support unlike other financial institutions. If your loan is deferred, you’ll accrue interest only on the balance of the loan. So far we’ve approved 97% of the 4,000 loan deferral requests we’ve processed. Learn more about deferring your mortgage here.
#7 Apply for a temporary rent supplement
The details: If you’re struggling to pay your rent due to a coronavirus hardship you can now apply for the new temporary rent supplement.
What it means for you: The province will provide your landlord with up to $500 a month to ensure you don’t lose your home.
But, restrictions apply. Though Theo and Lin pay over 30% of their income on rent (one of the requirements for the supplement), Lin’s income counts for the 2019 tax year. The couple’s total income was over $113,000 in 2019, so they don’t qualify. For people with no dependents, the income limit is $74,150.
#8 Request credit card payment relief
The details: The Canadian Bankers Association also recently announced that the big six banks would be offering relief on other credit products, but what that relief means really depends on the organization.
What it means for you: Vancity knows that many of its members are concerned about making ends meet during these trying times. That’s why we were the first financial institution in Canada to temporarily cut credit interest rates to 0% and defer minimum payments. You can call us directly at 1-888-826-2489 to request this relief program or find our more here.
#9 Delay your student loan payments
The details: The federal government has announced a freeze on Canada student loan payments and interest accrual for six months.
What it means for you: The province is freezing interest on all Canada student loans. On top of that, there’s an automatic pause on all government-issued student loan payments until September 30, 2020, giving you a bit more breathing room to focus on immediate costs. As it automatically pauses, you don’t even have to do anything for this to kick in.
#10 Defer your tax payments until August
The details: If you owe tax, the government is allowing you to defer payments until September 1, with no interest or penalties. Your quarterly instalments won’t need to be paid until then either. And if you haven’t yet filed for this year, you’ll now have until June 1, 2020 (though the June 15 filing date remains unchanged if you’re self-employed).
What it means: If you’re expecting to receive the GST Credit or Canada Child Benefit, make sure you file your personal tax return as soon as possible so you don’t delay the determination of these benefits for 2020-21.
If you know you’ll owe taxes this year, be sure to file on time in order to avoid late fees. And of course, if you’re expecting a tax return, the sooner you file the sooner you’ll receive your money.
#11 Request flexibility on your hydro bill payment …
The details: BC Hydro has introduced a COVID-19 Relief Fund to support its customers who are suffering financial hardship as a result of the pandemic.
What it means: If you or your spouse or partner have stopped working due to COVID-19, you could be eligible for three months of bill credit (up to $600) based on your average consumption. You can apply here.
#12 …and your car insurance
The details: ICBC is allowing customers hard-hit by the COVID-19 crisis to delay making payments for up to 90 days.
What it means: If you’re a client in good standing with a monthly auto plan payment plan, you can defer your payment up to 90 days with no penalty. (If your account isn’t up to date, the company promises to work together to find a solution that works for you.)
#13 Postpone RRIF minimum payments—if you can
The details: If you’re a senior, this pandemic is hitting you hard in two ways: health and retirement savings. That’s because if you’re over age 71, you’re required by law to make withdrawals from your RRIF at a time when markets are volatile—and you may be taking a big loss on your assets. To help cushion the blow, the federal government is lowering these minimum payments by 25% for 2020.
What it means for you: If you haven’t made a withdrawal yet, and you don’t need the money now, consider waiting until later in the year to withdraw when markets have hopefully stabilized.
We are here for you
Yes, these are tough times with no clear end in sight. But if you’re worried about your financial health in the short term, there are ways to reduce your expenses, defer payments and take advantage of income assistance measures to help you weather the storm.
We’ve also put together this list of resources to help you easily stay on top of financial assistance news.
Helpful links and resources
Aid and help are growing and changing so it’s important to check in regularly.
- The CommUNITY Centre (COVID-19 resources for Vancity members and British Columbians)
- Government of British Columbia
- Government of Canada
- Apply for CERB
- Apply for Employment Insurance
- Apply for Temporary Rental Supplement
- Child and family benefits calculator
This article is part of a Vancity series to help breakdown and explain COVID-19 economic stimulus measures and other forms of financial assistance for individuals and families, businesses, and investors – so they can endure and thrive during these difficult times.
- What COVID-19 economic aid means for your business
- 7 money-saving strategies and relief measures for your real-life needs
- How COVID-19 impacts your investments depends a lot on you
Updated May 3rd 2020 to include the update and lanch of the BC Emergency Benefit for Workers payment