I’m a pensioner from Stelco. What do I do with my CERP seniors’ payment?
Q: I'm a pensioner from Stelco and my wife is retired, too. She doesn't have her own employer-sponsored pension, but we split our Canada Pensions and we both get OAS. My walking buddy says I should be getting $300 from the government as part of their COVID assistance, because I'm a pensioner. Is this true? And can my wife apply, even though she doesn't get a pension? If so and we really don't need the money, do we have to keep it or can we give it away?
A: Your ambulatory pal is indeed the bearer of glad tidings - although, I'm going to help clarify some of the technicalities for you.
Due to the coronavirus pandemic, the federal government established the COVID-19 Economic Response Plan (CERP) to help Canadians financially endure this challenging time. Many aspects of the plan support individuals and businesses who have suffered loss of income, but one measure is specifically beneficial to seniors: If you are currently eligible for OAS (Old Age Security), then you will receive a one-time, tax-free payment of $300. (This payment is not unique to individuals who have a private pension, like you do from Stelco.) Because you and your wife are OAS recipients, you will both receive the $300 benefit.
Even better, neither of you has to apply to receive these funds. The payments are automatic and will be issued during the week of July 6 - that's this week! You might want to check right now, because the payment is directly deposited to the same bank account as your OAS pension. It's possible that you are both already $300 ahead and didn't know it!
Seniors who are also eligible for the GIS (Guaranteed Income Supplement) will receive an additional one-time benefit of $200, bringing the total benefit to $500, all of it tax-free.
Here are a few suggestions on what you might do with the lump-sum CERP seniors' payment. (I'm going to assume that you are only eligible for the $300 payment.)
1) If you have any debt, you could immediately apply the $300 toward the outstanding balance.
2) If you have a source of income that has decreased because of the coronavirus pandemic, you could keep your one-time benefit as a little emergency fund.
3) If your income is stable, you might consider paying it forward to someone in need. Perhaps you know of a friend or neighbour who is having a tough time because of the pandemic situation and $300 could really make a positive change in their life right now.
4) If you have excess funds, you could express your gratitude in a number of small gifts. First, write a little note on a handful of thank-you cards or a memo pad, saying, Thank you for being on the front line; you are appreciated!" Then, tuck a $20 bill inside each one and take these with you when you are out and about, passing them out to people you think could use the pick-me-up. Maybe that's the gal at the takeout window of the restaurant you frequent or a chap standing at the bus stop in a mask and hospital scrubs. Perhaps it's the person who delivers your groceries, or a service provider whose income has decreased, such as a hairstylist or small business owner. Or maybe hand one to a firefighter, police officer or paramedic. Your $300 will allow you fifteen of these gifts.
5) If you would like to make a more discreet gift, simply donate the $300 to your favourite charity, as they are all stressed for donations during the pandemic. And if they are a Canadian registered charity, then the charitable tax receipt you'll get will reduce your income taxes in 2020.
Most Canadian seniors can soon look forward to a bit of financial assistance from the federal government due to the COVID-19 crisis. Now you have a few ideas of how to use these one-time funds to best effect.
Thie Convery, R.F.P., CFP, CIM, FMA, FCSI, is a wealth advisor in Dundas. Her column appears bi-weekly in The Hamilton Spectator. Thie invites your questions at TheSpecMoney@gmail.com or by visiting www.ConveryWealth.com.