This year, many Canadians are eligible to receive the economic stimulus cheques the government is granting to those affected by COVID-19. The deadly virus is proving to be just as devastating to the global economy as it is to human life. The federal government plans to offer $105 billion for direct support measures, while another $55 billion is going toward tax deferrals.
With $82 billion in total going to citizens across Canada, it’s important to plan how to best use the money to stay out of debt. Read on for more information on getting the most out of your economic stimulus cheque.
How much am I getting?
Stimulus cheques go out according to each family’s need, based on income and the size of your household. If you’re a single parent or married couple with kids, you receive more money someone who does not have any children to care for. If you’re a high-income earner, you will get a smaller cheque than someone with low income or you won’t get a cheque at all.
Ill Workers Who Cannot Get Employment Insurance
People who fall under this category can receive an emergency care benefit. Recipients can receive these economic impact payments every other week over a 14-week duration. Applications became available as of April 1st, 2020.
Small Businesses Owners
Small business owners are getting a temporary 75 per cent emergency wage subsidy of up to $847 per week. This is also retroactive back to March 15th.
Economic Stimulus for Farmers
Farmers and those in the agri-food business can receive benefits from Farm Credit Canada.
Other Economic Measures to Offset Coronavirus Effects
In addition to the above, there are other ways the government plans to help its people, including:
- The Canada Revenue Agency is deferring any taxes you owe until August 31, 2020
- Recipients of the Canada Child Benefit will see an additional $300 per child starting in May
- Low-income homes will receive a $300 economic stimulus cheque in May, and $157 per child
- Women’s shelters across the country are going to receive approximately $50 million
- $305 million is going to the Indigenous Community Support Fund
How will I receive my economic stimulus cheque?
If you thought filing tax returns was going to be your biggest problem this April, think again. The government is going to use existing agencies and payment channels to make distributing money from the stimulus bill as easy as possible.
If you file annual income tax returns through the CRA…
You will receive your economic stimulus cheque the same way you receive your tax refund. If you get your refund via Direct Deposit, your stimulus Cheque will arrive the same way to the same bank account. If you have your refund mailed to you, then your stimulus Cheque will go to the same address.
The CRA will distribute the funds to the account or address that they have on file. If you haven’t yet filed your 2019 tax returns, they’ll use the information from your 2018 returns.
If you have moved or changed bank accounts since your 2018 return, then you should file a simple tax return from 2019 as soon as possible so they have your current information.
When will the money arrive?
You may begin to see funds coming in around May, but some cheques may come sooner.
It may take up to 8 weeks to receive your money by Direct Deposit. It could take longer for anyone wanting on a physical cheque.
How should I use my stimulus money?
Use economic stimulus cheque to purchase essentials.
Cover groceries that you need or costs if something crucial in your house breaks. If you and your household need it to survive, it’s a wise use of your money.
Avoid using the funds to over-buy products like toilet paper or canned goods. You may not even need them, depending on the length and limitations of quarantines in your province.
Save it until you need it OR the crisis is over
We usually encourage people to use the extra cash you receive to make extra payments on your credit cards. However, in this situation, don’t do that just yet!
Save your funds until you need to use them to cover essential items. Keep it in your savings account to make sure you don’t spend it until it’s absolutely necessary.
Prepare for Worst-Case Scenarios
If you’re working from home and don’t foresee any changes in your employment situation, you may feel comfortable using your stimulus for other purposes. But that may not be the best move.
Having a steady income with a full paycheque does not mean it will last. It’s not uncommon for companies to lay off or furlough employees while we deal with the Coronavirus.
Plan for the worst-case scenario and save your economic stimulus money in case your income changes suddenly.
After the Virus
You may have had to use your credit card during this pandemic. While it’s not ideal, it’s understandable. If you come out of the pandemic with your stimulus funds, use them to pay off your credit card debt.
Learn more about COVID-19 and maximizing your economic stimulus cheque by following our blog.