Covid 19 – Supplemental Income Benefits

 

Why this message to you today?  The Federal government is providing several supplemental income programs to Canadians during the Covid – 19 crisis.  It is important to understand that this IS taxable income and there are no tax-withholdings on the amounts you are receiving.  This means that when you file your taxes next year, 25% to 35% of this amount may need to be paid in income tax.

 

More Specifically:  (source: I have drawn this information from Federal Government website).

  • Canada Emergency Response Benefit:The benefit will be available to workers:
    • Residing in Canada, who are at least 15 years old;
    • Who have stopped working because of COVID-19 or are eligible for Employment Insurance regular or sickness benefits:  Examples of stopping to work could include but are not limited to: i) You have been let go from your job or your hours have been reduced to zero; you are in quarantine or are sick; you are away from work to take care of others who are sick (from Covid-19) or you are away from work to take care of children or other dependents whose care facility is closed due to Covid-19.  You can also apply for the Canada Emergency Response Benefit if you are eligible for Employment Insurance regular or sickness benefits.  You are not eligible for the Canada Emergency Response Benefit if you quit your job voluntarily.
    • Who had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and
    • Who are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period. For subsequent benefit periods, they expect to have no employment or self-employment income.
    • You do not need to be laid off to qualify for this benefit, but you do need to match the above criteria.

The income of at least $5,000 may be from any or a combination of the following sources: employment and self-employment. For those who are not eligible for Employment Insurance you may also include maternity and parental benefits under the Employment Insurance program and/or similar benefits paid in Quebec under the Quebec Parental Insurance Plan as part of the calculation for income.

For more information on all of the components of the Government of Canada Economic Response Plan you can go here: https://www.canada.ca/en/department-finance/economic-response-plan.html

 

"IMPORTANT DISCLOSURES: The comments above are for information purposes only and do not constitute specific financial advice regarding your specific situation. Please consult a professional financial advisor who is familiar with your personal situation before acting on any information presented above. Every effort has been made to ensure this information is presented responsibly and accurately. However, important details may have been missed or these details may have changed since the publication of this note. All facts and opinions noted above must be reviewed to ensure their accuracy is still relevant based on today’s specific situation, whatever that may be. Nelson Financial Planning Corp is not responsible for any action you take regarding this information."