Canadian Parents: How to Receive an Emergency $300 Per Child

A dividend king like the RioCan stock can produce the same $300 CCB one-time special payment with its nearly 10% yield. The REIT is a top choice of income investors.

Around the world, millions are struggling with the economic fallout caused by the novel coronavirus. Doctors and health workers have gone beyond the call of duty to treat, cure, and save patients from COVID-19. People in the front lines are the heroes of today.

Meanwhile, unsung heroes are caring for children at home. Parents are also undergoing stress and pressure because of lockdowns and school closures. In Canada, the government recognizes the role of and financial squeeze on parents during the healthcare crisis.

The Canada Child Benefit (CCB) is in place to provide financial support to parents as they go about their child care responsibilities. This year, however, the financial strain is deeper.

One-time boost per child

Canada is enhancing the CCB for families while the pandemic is raging. Parents who are already receiving the child benefit get a one-time $300 help per child on top of the May 2020 CCB payment.

The CCB is helpful since there is a single payment that comes every month. It’s tax-free and benefits low and middle-income families the most because they get higher payments. Those who received the $300 extra have a child under their care in May 2020 and have filed the 2018 tax returns.

For non-filers wishing to receive this particular payment, you must file your 2018 taxes as soon as possible. After filing, you may be eligible for retroactive benefits and credits. The only way to get these benefits is by filing your return.

July increase

The maximum annual CCB Canada Child Benefit will increase effective July 2020. Parents can keep pace with the rising cost of living. Parents with children under age six will receive $6,765 ($573.75 monthly per child). For those with children age six through 17, the CCB is $5,708 ($475.66).

CCB is economically helpful for parents, as all monthly payments are tax-free.

Earn $300 more tax-free

Parents with savings or free money of $39,100 can invest in a Tax-Free Savings Account (TFSA). RioCan (TSX: REI.UN), for example, is a generous dividend-payer. This large-cap real estate investment trust is yielding 9.22%. You can purchase 2,565 worth of RioCan shares and generate $300 in monthly income tax-free.

The current price of $15.34 is a bargain owing to the recent market sell-off. Despite the market carnage, this $4.84 billion REIT is keeping shareholders whole on the dividend payouts. The 65.45% payout is within the healthy range, so it’s safe to assume you’re not falling into a dividend trap.

Liquidity won’t be too much of a problem in the near term, as the REIT has $1 billion cash on hand (as of end March 2020) and unencumbered assets worth $9.2 billion. The occupancy rate remains high at 96.3%, while the average lease term is 7.3 years.

Lease renewals and cancellations are the threats if the economy takes a long time to recover. Also, the risk of lower rent collection is high in enclosed mall properties. But then again, a dividend king like RioCan is ideal for income investors and TFSA users.

Get the FREE money

Parents with children below 17 years old shouldn’t miss claiming the $300 one-time CCB boost. File your 2019 taxes too to continue to get the 2020-21 benefits and credits.

Fool contributor Christopher Liew has no position in any of the stocks mentioned.

More on Dividend Stocks

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

How I’d Structure My $14,000 TFSA for Constant Income

If you have $14,000 saved in your TFSA, here is one easy investment strategy to earn $50 of tax-free monthly…

Read more »

woman looks at iPhone
Dividend Stocks

I’m Not Selling Telus After the 55% Dividend Cut: Here’s Why

Contrary to what the market seems to be saying, Telus Corporation (TSX: T) still has a lot going for it.…

Read more »

monthly calendar with clock
Dividend Stocks

A No-Nonsense 3.7% Dividend Stock That Can Pay Retirees Monthly

This no-nonsense dividend stock has returned more than $3.4 billion to shareholders through dividends since 2013.

Read more »

dreaming of financial success
Dividend Stocks

3 Questions to Ask Before Buying a Dividend Stock

Buying a dividend stock? Here are three questions to help you look beyond the yield, with examples from Enbridge, Fortis…

Read more »

Woman in private jet airplane
Dividend Stocks

Make $100 a Month Tax-Free: How Much to Invest in Diversified Royalty and Where

The TFSA is the ultimate investment account to place your money and earn tax-free income.

Read more »

man in bowtie poses with abacus
Dividend Stocks

Passive Income From Dividends: What Canadians Can Realistically Expect

Here's the actual dividend math the passive income gurus won't show you.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

RRSP, TFSA or Both? A Quick Guide by Income Level

Your RRSP and TFSA are complementing accounts that you can use to shield your income from taxes.

Read more »

Real estate investment concept with person pointing on growth graph and coin stacking to get profit from property
Dividend Stocks

Buying Your First Home? The $8,000 FHSA Deduction Most Renters Miss

An eligible renter's $8,000 FHSA contribution can save $2,400 at a 30% tax rate, with the purchase date guiding investments.

Read more »