Supporting you through COVID-19

Eckler’s Webinar: Managing through difficult times

 

The uncertainty brought on by COVID-19 is being felt around the world. Loss of income, or the potential loss of income, and the decline of retirement and other savings, has many of us anxious about our personal financial situations. To help ease the stress on employees and members, Eckler’s free webinar on managing through difficult times, provides a concise overview of the information needed to create a personal financial plan, and provide some peace of mind.

We recognize that personal circumstances are unique and, as such, the webinar is not intended to provide individual financial advice or products. We encourage you to reach out to your employer or plan sponsor, your financial institution or creditors with specific questions or review the publicly available information on the government of Canada website.

If you have questions or comments about the information provided in the webcast, please connect with
us here.

Glossary

CCBCanada Child Benefit
CERBCanada Emergency Response Benefit
CLHIACanadian Life and Health Insurance Association
EIEmployment Insurance
FCACFinancial Consumer Agency of Canada
GSTGoods and Services Tax
RESPRegistered Education Savings Plan
TFSATax Free Savings Account
RRIFRegistered Retirement Income Funds
RRSPRegistered Retirement Savings Plan

Frequently Asked Questions

This website is intended for general guidance and information purposes only. While Eckler has made every attempt to ensure the information contained on the website has been obtained from reliable sources, Eckler makes no representations as to the accuracy, completeness, correctness, suitability, or validity of any information included on the website and will not be liable for any errors, omissions, or delays in this information or any losses injuries, or damages arising from its distribution or use. The conditions and parameters for relief measures related to COVID-19 are changing frequently. We are verifying this information in accordance with our established review practices and will endeavour to update the information on this website on a weekly basis. All information is provided on an as-is basis so we encourage you to continue to review the information provided on the government of Canada and provincial websites, or other reliable sources of information, as necessary.

Canada Emergency Response Benefit

The Canada Emergency Response Benefit (CERB) applies to wage earners, including contract workers and self-employed individuals regardless of their eligibility for Employment Insurance (EI).

The benefit is available to students who were employed before March 15, 2020 but stopped work, or loss income, as a result of reasons related to COVID-19, if they meet the following criteria:

  • Must be a Canadian resident at least 15 years of age when they apply
  • Have stopped working because of reasons related to COVID-19 or are eligible for Employment Insurance regular or sickness benefits or have exhausted their Employment Insurance regular benefits between December 29, 2019 and October 3, 2020
  • Had employment and/or self-employment income of at least $5,000 in 2019 or in the 12 months prior to the date of their application
  • Must not have voluntarily quit their job
  • Have earned less than $1,000 in employment and/or self-employment income for 14 or more consecutive days within the four-week benefit period of the first claim.
  • Have earned less than $1,000 in employment and/or self-employment income for the entire four-week benefit period of subsequent claims.

Students who lost income after March 15, 2020 as a result of COVID-19 but did not apply during the initial CERB period because their  income was too high, can now apply for the initial four-week benefit period provided they qualify as above.

The Federal government also recently announced the Canada Emergency Student Benefit (CESB) for students who did not qualify for the CERB payment. While legislation has not yet been confirmed, the CESB is intended for post-secondary students who:

  • are currently in school
  • are planning to start school in September 2020,
  • have graduated from school since December 2019

The proposed benefit amount is $1,250 per month from May to August. Students who meet the requirements above, and who are also disabled or a caregiver, are eligible for a CESB of $2,000 per month. It is expected that additional information will be provided in the next few weeks.

EI applicants who  applied to EI before the CERB launch and have pending applications, will automatically be enrolled into CERB.

You may only apply for one benefit.  EI applicants who applied to EI before the CERB launch and have pending applications,  will automatically be enrolled into CERB.

The CERB is intended for workers who have stopped working, or loss income, as a result of reasons related to COVID-19, and:

  • did not voluntarily quit their job
  • earned less than $1,000 in employment and/or self-employment income for 14 or more consecutive days within the four-week benefit period of the first claim
  • earned less than $1,000 in employment and/or self-employment income for the entire four-week benefit period of subsequent claims.

If you lost income after March 15, 2020, as a result of COVID-19 but did not apply during the initial CERB period because your income was too high, you can now apply for the initial four-week benefit period provided you qualify as above.

At this point, no income verification is required, however, provided information will be verified at a later date.

Individuals who are receiving CPP but were working on March 15, 2020, and stopped working, or lost income, as a result of reasons related to COVID-19 qualify for the CERB if they:

  • did not voluntarily quit their job
  • earned less than $1,000 in employment and/or self-employment income for 14 or more consecutive days within the four-week benefit period of the first claim
  • earned less than $1,000 in employment and/or self-employment income for the entire four-week benefit period of subsequent claims.

If you lost income after March 15, 2020, as a result of COVID-19 but did not apply during the initial CERB period because your income was too high, you can now apply for the initial four-week benefit period provided you qualify as above.

Child Care Benefit

There are not a lot of details available at this time. The Government of Canada’s website states that those eligible will see their payments increase by $300. The payments are based on your Adjusted Family Net Income (AFNI), the higher your AFNI the more the Child Care Benefit is reduced. It appears as though the AFNI calculation will remain the same, so recipients should just see their payments increase by $300. The increased payments will begin in May. It is not a taxable benefit.

Other Relief Programs / Benefits

Auto insurance and most insurance products are regulated provincially and offered by private insurance companies. We are only monitoring federal developments at this time. We recommend reaching out to your insurance company to see if any relief is available as regularly monitoring the Insurance Bureau of Canada’s website.

While we aren’t aware of any national programs available to seniors, there are measures that the different provinces are taking. We recommend checking the CARP (Canadian Association of Retired Persons) website for updates.

Investment Related

You should continue to contribute to your employer RRSP if you are financially able. Contributions made now will be purchasing more investment units at lower prices – the classic, buy low, sell high.

This is a good way to bring down your average cost and increase your returns. The markets will eventually recover and we will all need retirement savings one day. Also, in some employer RRSPs there is an employer matching contribution, another great reason to contribute.

If you had sold other investments earlier this year and realized a gain (you sold for more than your purchase price), you would need to report that on your 2020 income taxes and pay tax on the gain. If you sell investments now at a loss, then you can use that loss to offset your prior gain, thus reducing your income taxes.

If your investments are held in registered accounts (Pension, RRSP, TFSA) then you don’t pay income tax on any gains and should not consider selling for tax purposes.

In general, it is a good idea to remain invested during volatile times like this. We are seeing significant swings in stock markets (both down and up) each day and timing when to sell and buy back in has been a very difficult strategy to get right. It is impossible to predict what the markets might do on any given day. Long term investors have historically been rewarded for staying invested.

It is common for lines of credit to charge an interest rate related to the Prime Interest Rate declared by their financial institution. These are variable lines of credit and the interest charged will vary based on Prime. As the Bank of Canada has lowered overnight rates three times in March, the banks have followed with reducing their Prime Interest Rate. The large five banks’ Prime Interest Rate is now 2.45% whereas it was 3.95% at the beginning of March.

Yes, you still have to withdraw the minimum amount from your RRIF. The amount for 2020 has been lowered by 25% from where it normally would be. So far, the government has only adjusted the RRIF amount for 2020 and in 2021 it will revert to the normal schedule.