Canada is grappling with rising COVID-19 cases. Alberta and British Columbia have set records in the number of new cases, hospitalizations, and ICU. Authorities are taking strict measures against those who are not following COVID-19 restrictions. It is better to stay indoors and go out only if it is urgent. The Canada Revenue Agency (CRA) is helping you fight the virus with the $1,000 Canada Recovery Sickness Benefit (CRSB).
Are you sick or under 14-day home quarantine?
Last month, some pharma companies released a positive update around the COVID-19 vaccine, building everyone’s hopes that they will get respite from the pandemic. Even though a vaccine is around the corner, the COVID-19 threat has not disappeared. Until the vaccine is administered to a large number of people, the threat of virus spread will remain.
Have you been tested COVID-19 positive or have been advised to stay in the 14-day quarantine? Find out whether you qualify for the CRSB?
Do you qualify for CRSB?
The CRA launched the CRSB to help people who are sick or tested COVID-19 positive to stay at home and help the government flatten the curve. The CRA will give you $500 a week before tax for up to two weeks as a sickness benefit.
If you a sick or in a 14-day quarantine, you can apply for CRSB if you meet the following criteria:
- You are above 15 years of age and staying in Canada. This means even immigrants, students, and retirees working and living in Canada can apply for CRSB.
- I specifically mentioned working in Canada because the CRSB is for those who earned at least $5,000 last year, this year, or in 12 months from the date of application.
- You should not receive paid sick leave or any other COVID-19 benefits for that period.
- With work from the home culture at its peak, you qualify for CRSB only if you were unable to work for at least 50% of your working hours during that week.
For instance, Mary is a cook and can’t work from home. She fell sick on December 3 and self-isolated. She can’t apply for CRSB this week as her working hours were not reduced by 50%. However, she can apply next week if she meets all other criteria.
How to apply for CRSB
You can apply for the CRSB after one week when you were sick. You can apply for the benefit the following Monday of every week. Even if you forget to apply on Monday, you can do so within 60 days from that date. For instance, for the period November 29 to December 5, you can apply on My CRA Account between December 7 and February 5, 2021.
The CRA will review your application and credit $450 after tax in three to five business days in case of direct deposit. In the case of cheque payment, it will take 10-12 business days. This amount will be added to your 2020 taxable income.
It’s time to prepare for emergencies!
The pandemic has reiterated the need for emergency funds. An emergency can take any form, medical, unemployment, or any other sudden expense. A personal emergency fund can give you the financial flexibility to be ready for smaller emergencies. While there is no set amount on how much you should save for an emergency, having six months’ salary in this pool is a good start.
Enbridge (TSX:ENB)(NYSE:ENB) is a good stock for emergency funds as it is less volatile and pays quarterly dividends. In the last 25 years, it has increased its dividend per share at a compound annual growth rate (CAGR) of 11%, which means it can adjust your emergency fund for inflation.
Enbridge has a robust business model of earning cash for transmitting oil and natural gas through its pipeline network. This model ensures regular cash flows and reduces exposure to oil prices.
If you invest $5,000 in Enbridge through the Tax-Free Savings Account (TFSA), you can get $385 in annual dividend income. This income could grow to $565 by 2025 if the pipeline operator increases its dividend per share at a CAGR of 8%.
