The COVID-19 pandemic has impacted Canadian students, workers, parents, children, seniors, and everyone in between. Financial uncertainty continues to be a large area of concern, although many have been impacted in other ways too. The Government of Canada has responded to the financial needs of Canadians through their COVID-19 Economic Response Plan. The health of seniors is a top priority; however, their financial well-being is also important and has not been forgotten amongst the volatility of the pandemic. The Canadian government has provided financial relief for them as well.
Some seniors may be eligible for more government support, depending on their circumstances. Here are a few of the available financial resources.
Minimum withdrawal reduction for RRIFs
A Registered Retirement Income Fund (RRIF) is an arrangement between an individual and a carrier that is registered with the government. The carrier could be an insurance company, bank, or trust company. Property is held within the RRIF, which may have been transferred from an RRSP, another RRIF, or another source. The carrier makes payments to the individual from the RRIF, and the earnings are tax-free. However, payments from the RRIF are taxable upon receipt.
Usually, there is a minimum amount that must be paid to the RRIF recipient during the calendar year. Due to the COVID-19 pandemic, the Canadian government has reduced the minimum withdrawal amount by 25% for the remainder of 2020. The purpose of reducing the minimum withdrawal amount for RRIFs is to give seniors the ability better to control their taxable income in uncertain economic times.
Extension of the Guaranteed Income Supplement and Allowance payments
The Canadian government has temporarily extended the Guaranteed Income Supplement (GIS) and Allowance payments, even for seniors whose 2019 income data has not been reviewed. The goal of this temporary extension is to ensure that vulnerable seniors continue to receive their benefits at a time when they need them the most.
Usually, the submission of the previous year’s income data is a requirement to receive GIS and Allowance payment benefits. Seniors should submit their 2019 income data as soon as they can but at the very latest by October 1, 2020. Doing so will ensure there is no interruption in benefit payments.
One-time, tax-free payment
Seniors who qualify for the Old Age Security (OAS) pension in June 2020 are also eligible for a one-time, tax-free payment of $300. Seniors will get an additional $200 if they qualify for the Guaranteed Income Supplements (GIS) during the same period. In total, seniors who are eligible for both the OAS and the GIS would get a $500 one time, tax-free payment. The purpose of this payment is to help cover the increased costs resulting from COVID-19.
Having a common-law partner or spouse won’t impact eligibility. Both parties will receive the one-time, tax-free amount, as long as the eligibility criteria are met. And since the payment is non-taxable, seniors will not receive a tax slip or have to report the funds in their 2020 tax return.
Seniors do not need to apply for this payment. Individuals who are scheduled to receive the OAS and the GIS payments in June 2020 will automatically get the additional amount. The payments are expected to be made as soon as possible, and individuals will receive either a direct deposit or cheque, depending on which payment method they initially enrolled.
Support for seniors through personal outreach programs
The Canadian government has contributed $9 million through United Way Canada with efforts to support local organizations that provide services to seniors. These services include the delivery of medication, groceries, toiletries, and other daily necessities. Also, the contribution intends to support personal outreach programs that assess the needs of seniors and connect them to community support.
The expansion of the New Horizons for Seniors Program
As a result of the growing senior Canadian population, the government implemented the New Horizons for Seniors Program (NHSP). The program’s objectives are to empower seniors, enhance social well-being, and encourage seniors to share their skills, knowledge, and experiences with others in their community.
The Canadian government has invested an additional $20 million to support organizations that provide community-based projects that reduce isolation, help seniors maintain a social network and improve the quality of life of seniors overall.
Any organization that received funding from the 2019 to 2020 NHSP community-based stream can use the money for immediate and essential services for seniors impacted by the pandemic.
Taking care of senior populations
Senior populations have been hit the hardest, both from a health standpoint and economically. Since many seniors rely on a fixed income, the COVID-19 crisis may create more considerable financial hurdles for them. As savings dwindle, the costs of essentials are rising. That means vulnerable seniors will need more financial support and longer-term solutions to the growing issues facing older Canadians.