The average citizen doesn’t have a substantial emergency fund that they can dip into during these times. They’re living from paycheque to paycheque. They have debts to pay off. They worry about making their bills every month. That’s why the Canadian government has introduced debt relief programs to help.
If the coronavirus pandemic has impacted your financial stability, read this to learn about the financial relief options you can get from the government and the debt professionals at David Sklar & Associates.
Financial Relief Plans:
Canada Emergency Response Benefit (CERB):
The Canadian government has rolled out the Canada Emergency Response Benefit to provide financial aid for citizens affected by COVID-19. The benefit is available to citizens until October 3rd, 2020. The benefit provides $500 per week for up to 16 weeks. It’s designed for people who have been laid-off or had their hours reduced to zero because of COVID-19. It’s also for people who cannot work because they’re currently sick, in quarantine, or caring for someone else who is sick.
Here are the main qualifications that make you eligible to apply:
- You are 15 years old or older
- You reside in Canada
- You had an income of at least $5000 in the 12 months prior to the application date
- You have stopped working because of COVID-19 (not voluntarily)
- You are not eligible for EI (Employment Insurance) benefits
- You expect to be without income from employment/self-employment for at least 14 consecutive days
If you meet the qualifications for Employment Insurance, you can sign up to receive benefits to support you through this difficult time. However, the government has announced that new claims made for EI will be automatically processed through CERB.
While this benefits program is more inclusive than EI, there are still people who feel like CERB is leaving them behind. Freelancers who have lost a majority of their wages/clients, university and college students and undocumented immigrants are just some of the groups that might not be able to access the funds.
The provincial government has also boosted its support services to help citizens get through COVID-19. Ontario Works has expanded its Emergency Assistance program for groups that will be especially vulnerable during this time. You will be able to access financial support for essentials (groceries, clothing, shelter) and health benefits. You can fill out your application online or do it over the phone.
Canada child benefit (CCB):
Schools, daycares, and community centers are closed. Social distancing means that parents can’t depend on friends and family members to help with childcare. And, with a sudden rise in unemployment, more Canadians are wondering how they are going to take care of their children, physically and financially.
The federal government understands that this time can be especially strenuous on parents. To make the situation a little easier, they are increasing the Canada Child Benefit program. Parents can receive up to an extra $300 per child during the month of May.
The federal, provincial, and local governments have given frequent updates about relief programs and opportunities since the crisis first came to Canada. As time goes on and more Canadians need support, they will likely increase and improve these programs. So, keep your eye on the news. More help is on the way.
Status of Important Payments
As you know, this pandemic has hit Canada in the midst of tax season. Normally, you would want to finish filing your income tax by April 30th, 2020. The deadline for individuals has now been extended to June 1st, 2020. The federal government is also allowing individuals to defer payments of their income tax until August 31st, 2020.
If you have the funds and the documents to file your taxes, you can still do it online. Plenty of accountants are continuing to offer their services online. You can have a consultation over the phone or through a video chat. You can send your documents through email. And you can fill in your application through the Canada Revenue Agency’s website.
If you are concerned about your student loan payments piling up during the crisis, you’re not alone. Lots of Canadians are trying to chip away at a mountain of student debt every single month. You might be relieved to learn that the federal government has put a moratorium of federal student debt payments and interest. Provincial loans through OSAP will also be temporarily deferred for the same period.
Housing will likely be your biggest concern. You might be panicking about paying off your rent or your mortgage when a disaster like this affects your income.
Countries like Ireland and France have suspended rent payments during the pandemic. Canada has yet to do this, but they have taken some actions to support tenants. Politicians have asked for landlords to be understanding during this stressful time, asking them to contact tenants who are struggling and come up with feasible solutions. It’s possible that your landlord will accept a smaller amount or a delay.
The premier of Ontario, Doug Ford, also announced an eviction freeze — this means that a landlord cannot legally evict you from the premises. If you have missed a rent payment due to this crisis, you do not have to panic about losing your home. If you received an eviction order before the crisis, it has been postponed.
If you have mortgage payments that you can’t afford at the moment, you can try to get a mortgage deferral. A mortgage deferral is an agreement between you and your lender that pauses/suspends your mortgage payments for a period of time. You can get a deferral for up to six months to relieve yourself of the financial burden until you have a steady income once again.
If this information doesn’t help you, you should know that the government’s financial aid programs like EI and CERB are designed to help you pay for essentials like housing. You can also use emergency relief from the Ontario Works program to do the same.
Other changes that could ease financial stress:
- Extended grace periods for property tax payments
- The option to apply for property tax relief
- Extension for utility bill payments (water/sewer services)
- Toronto Hydro will only charge the off-peak rate 24/7
- No Toronto Hydro disconnections will happen until July 31st, 2020
Dealing with Debt and COVID-19
Multiple organizations are working hard to reduce citizens’ debt loads during this crisis. Utility companies are reducing rates and extending payment deadlines. Banks around the country have lowered interest rates and offered mortgage deferrals. They have also offered compromises for clients who are struggling financially, giving them deadline extensions or deferrals for various credit options. Other creditors are pushing deadlines back, cutting penalties, and acting with more forgiveness and flexibility than usual.
Despite all of these relief options, you might still be worried about your debts right now. If that’s the case, you should know that David Sklar & associates are here to help.
A Licensed Insolvency trustee can help:
When you need advice about your finances, you should look for a professional. Our licensed insolvency trustees have years of experience consulting clients about financial trouble. If you’re concerned about your loss of income, you can always contact one of our trustees to see what steps you can take to gain some stability. If you were already in need of debt relief and the economic shake-up has only made that need stronger, one of our trustees can go over your situation and come up with an effective recovery plan.
Making a Budget:
You’ve applied for government benefits and emergency relief. Now, you’re wondering about how you’re going to make these limited funds last you for the next month. This is where a budget comes in.
A thoughtful budget during a temporary crisis will focus on essentials. The majority of your costs should be dedicated to groceries, medicine, shelter, and utilities. Anything else should be considered a secondary cost that can be trimmed or cut away entirely.
A budget does more than calculate what you need to spend. It’s an excellent tracking tool, too. Use it to track how much money you have left as the weeks go by and see how long you can stretch those savings.
If you’ve never put a budget together, you can always ask a licensed insolvency trustee for help. We also have budgeting tools on our website that are easy to find and use.
Take a deep breath and try to stay calm. Panicking is not going to help you with your personal finances. If anything, it could make things much harder than they should be.
So, don’t make any financial decisions that you can’t back out of. Don’t apply for a large loan or file for bankruptcy. It’s not the time for drastic measures. You don’t know what the future holds. A few months from now, you could have a new job. The government could have additional relief options. You could have stability.
If you’re still struggling with debt when the country is no longer in crisis-mode, you can look into financial help services like consumer proposals, division 1 proposals, or personal bankruptcy. These options could make your financial recovery more achievable.
Debt Relief Options:
It’s possible that you’re already using our consumer proposal services or bankruptcy services for the sake of debt relief. If you’re concerned about whether your repayments will negatively impact the limited funds you already have, don’t worry.
The Office of the Superintendent of Bankruptcy has asked trustees across Canada to be flexible with clients to make sure that they feel supported and safe at this time. We are ready to address your concerns. Contact your licensed insolvency trustee to see if you can make temporary adjustments to your repayment process. A single phone call or email could put your mind at ease.
David Sklar & Associates
The economic repercussions of COVID-19 are likely causing you a lot of stress. A silver lining to this dark cloud is that the government is rolling out emergency benefits and pausing regular payments to support struggling citizens. And if that’s not enough, David Sklar & Associates is here to help people get through this rough patch.