As COVID-19 continues to spread across the country, more Canadians are finding themselves out of work or dealing with decreased income due to the pandemic. Fortunately, the federal government has announced a series of measures to help citizens make ends meet in this stressful time. Whether you’re a parent staying home to care for your children, a freelancer dealing with a reduced client base, or have been laid-off and are having trouble paying your student loans, there is a benefit or financial relief program available. Here are the top emergency financial relief programs:
If You Lost Your Job – Employment Insurance
If you lost your job through no fault of your own, there’s a good chance that you qualify for Employment Insurance (EI) regular benefits.
Do I qualify for EI and how to apply?
You may be entitled to EI regular benefits if you:
- Were employed in insurable employment;
- Lost your job through no fault of your own;
- Have been without work and without pay for at least seven consecutive days in the last 52 weeks;
- Have worked for the required number of insurable employment hours (between 420 to 700 hours) in the last 52 weeks or since the start of your last EI claim, whichever is shorter;
- Are “ready, willing and capable of working each day;”
- Are actively looking for work (make sure to keep a written record of employers you contact, including when you contacted them).
You can apply on the Government of Canada’s Employment Insurance website.
If You’ve Lost Income – Canada Emergency Response Benefit (CERB)
COVID-19 has negatively impacted the finances of millions of Canadians, from wage earners to contractors and small business owners, almost everyone will be affected negatively. Even worse, many may not qualify for Employment Insurance regular benefits. To help Canadians cope with the loss of income, the federal government launched the Canada Emergency Response Benefit (CERB).
- Workers who must stop working due to COVID19 and do not have access to paid leave or other income support.
- Workers who are sick, quarantined or taking care of someone who is sick with COVID-19.
- Working parents who must stay home without pay to care for children that are sick or need additional care because of school and daycare closures.
- Workers who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work.
- Wage-earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance.
If Your Working Hours Have Been Reduced – EI Work Sharing Program Extension
If you are still working but your hours have been cut and you meet the eligibility requirements for employment insurance, your employer may apply for the Work Sharing Program. It was designed to help employers and employees avoid layoffs due to a temporary reduction in business beyond their control. It provides income support to employees eligible for employment insurance benefits who work a temporarily reduced work week while their employer recovers.
How Long Can We Work Under the EI Work Sharing Program?
Due to COVID-19, the Work Sharing Program has been extended from a maximum of 38 weeks up to 76 weeks. Learn more about the Work Sharing Program.
If You Have Children – Canada Child Benefit Top-Up
The estimated 3.5 million families with children who regularly receive the Canada Child Benefit will be able to put a little more cash in their pockets this year.
If You Have Student Loans – Student Loan Interest Moratorium
Canadians with public student loans through Canada Student Loan can take advantage of the six-month, interest-free grace period. It is similar to the grace period available immediately after graduating from post-secondary school.
If You Have a Mortgage – Deferred Mortgage Payments
If the benefits above aren’t adding up for you, and you’ve bought a house in Canada, you might be worried about how you’re going to make your mortgage payments. Several of Canada’s biggest mortgage lenders have indicated via social media that they will allow their borrowers to defer their mortgage payments, or to “skip a payment.” These options are available on mortgages and other types of loans and credit card payments as well.
How Do I Apply to Skip a Payment or Defer My Mortgage Payment?
With encouragement from the federal government, most lenders have indicated that deferrals will be granted on a case-by-case basis. If you aren’t sure you will be able to make your next mortgage payment, contact your lender directly to discuss a deferral. Make sure you fully understand how the change will affect your future interest payments, any potential penalties you could occur and impact on your credit rating. Learn more about mortgage payment deferrals.
If You Are Retired – Minimum RRIF Withdrawal Reduction
Public health isn’t the only thing that COVID-19 has wreaked havoc on. The stock market has been chaotic with losses cutting into portfolios and causing even seasoned investors to cringe. If you’re retired and drawing from your Registered Retirement Income Fund (RRIF) or defined contribution pension plan, you can reduce the total amount you withdraw this year by 25%.
Why Would I Reduce the Amount I Withdraw From My RRIF?
This change gives you the benefit of reducing how much of your retirement fund you need to liquidate. By minimizing the amount you withdraw, you’ll allow the remaining amount more time to increase in value when the stock market recovers. Learn more about RRIF withdrawal reductions.
If You Are a Small Business Owner or Contractor – Income Tax Deferral
The Canada Revenue Agency has issued several deferral notices to small business owners and others making quarterly income tax payments. Right now, your income taxes are deferred until August 31, 2020.
For Canadians Filing Income Tax Returns – Deadlines Extended
This time of year is usually known as income tax filing season. Unfortunately, the COVID-19 pandemic has diverted everyone’s attention from filing income taxes. In response, the CRA has extended the deadline for filing until June 1, 2020.
For Low-Income Canadians – GST Credit Top-Up
The Goods and Services Tax Credit is a tax-free quarterly payment available for low- and middle-income families. You are assessed automatically for the GSTC when you submit your income tax return. This year, the federal government is increasing the payment, which will effectively double the size of the GSTC and benefit about 12 million Canadians.
The Last Word
The COVID-19 pandemic is a public health crisis unlike anything we’ve seen in our lifetimes. The Canadian government understands that the measures they’ve put in place to limit the spread of the virus have caused financial hardship for businesses and workers. The feds have made it clear that they are prepared to introduce additional measures in the future to reduce the impact the coronavirus pandemic is having on Canadians. Keep checking back regularly for updates since the government programs outlined above are actively evolving and may change on short notice.
If you can’t make ends meet, you may need to tap into your emergency fund, take out a personal loan, or use a low-interest credit card. Another option to tide you over KOHO’s Early Payroll feature, which lets you access up to $100 of your paycheque three days early, to help you access enough cash to stay afloat during these trying times. Read about How to Survive a Financial Crisis for more expert advice.