It’s been six months since the COVID-19 outbreak. You can’t be in a lockdown forever. Hence, the Canada Revenue Agency (CRA) is shifting from locking the economy to reopening it and living with COVID-19. The CRA is moving to the next phase of the recovery with two new recovery benefits aimed at helping Canadians fight COVID-19. It has introduced $500 weekly cash benefit for sick and another $500 weekly benefit for caregivers.
Finance minister Chrystia Freeland said, “We recognize that there continues to be an ongoing public health crisis in our country, and we need to prepare for other possible economic shutdowns due to outbreaks or future COVID-19 waves.”
The CRA’s new recovery benefits
The CRA has introduced three new recovery benefits for 12 months starting September 27.
- The Canada Recovery Benefit, which is an alternative to the Canada Emergency Response Benefit (CERB)
- Canada Recovery Sickness Benefit (CRSB)
- Canada Recovery Caregiving Benefit (CRCB)
The CRA is creating a new webpage where you can apply for these three benefits. It will reveal details on how to apply in a few days. So far, what we know about these benefits is they are taxable, temporary, and will be paid after the end of the benefit period as arrears.
I will talk about CRSB and CRCB, which are aimed at supporting the sick and caregivers.
The Canada recovery sickness benefit
As Canada shifts to living with COVID-19, there is an urgent need to ensure everyone has paid sick leave. Many companies offer paid sick leaves. But those who don’t have access to such type of benefit from their employer will get the benefit directly from the CRA. This includes gig or contract workers, self-employed, and freelancers.
The CRSB will give you $500 per week for up to two weeks if you fall sick or have to quarantine yourself for 14 days for coronavirus-related reasons. This will help people to stay home without worrying about their living expenses.
The Canada recovery caregiving benefit
The CRA has also announced a $500 CRCB per week for up to 26 weeks. You can avail this benefit if you have to say at home to care for dependents because
- Schools, daycares, or other care facilities are closed due to COVID-19; or
- A medical professional has advised them to not attend school, daycare, or other care facilities as they are at high risk of severe illness if they contract the virus.
You will not be eligible for the CRCB if the schools and care facilities are open, but you choose not to send your kids or other dependents. The dependents include children below 12 years of age, a family member with a disability, or a family member who is at high risk.
The CRCB will take care of your living expenses. One household can claim only one CRCB of $500 at a time for 26 weeks. If you have two kids and one high-risk grandparent, you cannot make three CRCB claims (for up to $1,500) at a time.
You can avail both CRSB and CRCB anytime in the next 12 months starting September 27. The CRA has kept such a long benefit period as it will take at least a year for a vaccine to come and everyone to be vaccinated.
Make the most of the $500 benefit
The two recovery benefits are over and above your $400 a week in CERB alternative. The CRA did not reveal any income criteria for CRSB and CRCB. If the CRB amount is sufficient to meet your family’s expenses, you can use the sickness or caregiver benefit to create a medical emergency fund.
Constellation Software (TSX:CSU) is a relatively low-risk software stock that has grown at an average annual rate of 30% in the last five years. The company grows revenue and profits by acquiring smaller companies with stable cash flows. It has a diversified customer base and a broad portfolio that makes it resilient to an economic crisis.
If you had been investing $500 in Constellation every year since January 2015, you would now have over $7,500 in your medical emergency fund.
Here are more stocks that can double your $500 CRSB/CRCB payments!
Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.
Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Constellation Software.