COVID-19 has invaded all aspects of our lives, including our financial situation. The federal government, in response, has provided one-time payments and help for seniors (65 +). This, in turn, helps adult daughters and sons because many consistently pay for some of their parents’ expenses. This financial assistance is reviewed and explained in terms of eligibility, amounts and application process. A review of Old Age Security (OAS) and Guaranteed Income Supplement (GIS) is also provided.
COVID-19 and increased costs for seniors
- Food price increases (because of supply chain disruptions)
- Transportation and delivery costs
- Increase in prescription medication fees
Summary of COVID related federal aid to seniors
- GST credit
- Canada Emergency Response Benefit (CERB), also available to seniors who were working and lost income during COVID
- RRIF flexibility AND
- As of May 31st, there will be a one-time payment for seniors who receive OAS and GIS benefit.
OAS AND GIS one-time, tax-free payment for eligible seniors (65 +)
- $300 for seniors eligible for the Old Age Security (OAS) pension
- $200 for seniors eligible for the Guaranteed Income Supplement (GIS)
- Seniors who receive both the OAS pension and the GIS will be eligible for both payments for a total one-time payment of $500.
If you are already receiving the Old Age Security (OAS) pension and the Guaranteed Income Supplement (GIS), you do not have to apply for this new one-time payment. It will be automatically paid to eligible seniors as of May 31st, 2020.
What is Old Age Security (OAS)?
If you did not receive a letter from Service Canada ( a month after turning 64) informing you that you were selected for automatic enrollment, you must apply for the OAS pension.
What is Guaranteed Income Supplement (GIS)
The Guaranteed Income Supplement provides a monthly non-taxable benefit to Old Age Security (OAS) pension recipients who have a low income and are living in Canada. To be eligible, individuals must be receiving OAS and their annual income must be lower than “maximum annual threshold” .
In March, 2020, there were 6.5 million seniors receiving old age security payments and 2.1 million receiving GIS payments. That means that almost 1/3 of Canadian seniors are low-income! No wonder that Canadian caregivers are spending, on average, $275 per month on out-of pocket expenses like prescription dispensing feeds, transportation, and meals.
Get that income tax filed!
Eligibility for the Guaranteed Income Supplement (GIS) is reviewed every year and is based on the applicant’s (or couple’s) net income in the previous calendar year. Payments can increase, decrease or even cease according to reported changes in annual net income.
In response to the COVID-19 pandemic, the federal government has temporarily extended GIS supplements without this income tax assessment. All seniors, however, are encouraged to complete and file their 2019 income tax as soon as possible and no later than October 1, 2020. Why wait? For simple tax filings, it is possible to have it completed for FREE by community volunteers or tax clinics over the phone or by video conference.
The importance of income tax completion can’t be overstated. Much of the financial aid for seniors (including at the provincial and municipal level) requires this as a way to verify income.
The one-time payment doubled the annual GST/HST credit amounts for the 2019-2020 benefit year (2018 tax year).
You will have received the one-time special GST/HST credit payment amount automatically (April 2020) if you normally receive the GST/HST credit and have filed a 2018 tax return. An average payment of $375 for single seniors and $510 for senior couples was provided to almost 85 per cent of single seniors and almost half of senior couples.
In Canada, Registered Retirement Savings (RRSP)Plans have to be converted to either a RRIF or a registered annuity before the end of the year you turn 71. Individuals must withdraw at least the required minimum amount annually from your RRIF, starting in the year after you set it up.
For 2020, the federal government has reduced the minimum withdrawal by 25 %. The intention is to preserve assets during these pandemic times when the market is so volatile.
This is a taxable benefit of $2,000 every 4 weeks for up to 16 weeks to eligible workers, including seniors, who have lost their income due to COVID-19. Pension income does not affect eligibility to the CERB. The government also extended the eligibility of this benefit to individuals who earn up to $1,000 per month.
Questions? Contact MP’s constituency office
If your parents are eligible for this COVID related financial assistance from the federal government, and have not received it, the quickest route to resolution is to have your parents contact the local constituency office of their federal Member of Parliament (MP). Without a Power of Attorney, you won’t be able to do this for them unless you are calling with general questions. If you are unsure of the contact information for the MP, here is a list of current MPs, which you can search by Postal code.
Let us know how this government assistance has helped your parents during this pandemic.