Did you know that there are many ways to receive money from the Canada Revenue Agency (CRA) and other government agencies? In some cases, the checks come in automatically when your income falls below a certain threshold. In other cases, you have to actively apply for them. What all CRA benefits have in common is that you need to experience some sort of financial “need” in order to get them. With that out of the way, here are three CRA benefits you should grab in 2024 if you are eligible.
GST/HST cheques
GST/HST cheques are the standard CRA benefit that most people will be familiar with. They are quarterly cheques worth about a hundred dollars or so per pay period. As you probably know, you don’t have to apply to get these. Pretty much everyone got them when they were young and unemployed, you keep getting them indefinitely if your income falls below a certain threshold.
Although there’s no way to “apply” to get GST/HST cheques, there is a way to make yourself eligible: make Registered Retirement Savings Plan (RRSP) contributions! RRSP contributions lower your income. If you earned $62,255 in 2022 and made $10,001 worth of RRSP contributions, your “income” would have fallen below that year’s threshold. Presto! GST/HST cheques all through the next fiscal year.
Family benefits
Another category of benefit you can get in 2024 is family benefits. This isn’t really one benefit but a collection of benefits, such as the Canada Child Benefit, which pays a sum of money to those with children. The formula for calculating this benefit is to complex for me to spit out a representative figure, but this one can pay out a lot more than GST/HST cheques do.
Caregiver benefits
EI’s caregiver benefits are similar to the Canada Child Benefit: they pay you money if you care for someone. In this case, it doesn’t have to be a child, it can be a disabled adult. Also, this benefit is a top up to EI, it’s not a simple cash transfer that you just apply for.
How to spend your benefits
Some CRA benefits have to be spent a certain way. Family and caregiver benefits, for example. Others, such as GST/HST, are pretty much “free money,” which you can spend however you want without the slightest hint of guilt. Hooray! One option you have for such cheques — provided you pay all your bills and meet the needs of any children or other dependents first — is to invest them in the stock market.
Consider Fortis (TSX:FTS), for example. It’s a Canadian dividend stock with a 4.37% dividend yield. That yield might not sound like a whole lot, but when combined with capital gains, it has helped Fortis stock outperform the TSX over the last five years, a period in which it has earned an 11.8% CAGR (compound annual growth rate) return.
Will Fortis keep up the good results in the future? It’s hard to say, but there are some positive signs here. First, the company is a regulated utility — such companies enjoy minimal competition and locked-in, recurring revenue. Second, Fortis has invested more money in growth than most utilities have, which has resulted in decent capital gains. Third and finally, the stock has a moderately high dividend yield with a fairly reasonable (78%) payout ratio. I’d say the odds are that this stock keeps doing well.
