Canadians continue to look for any way they can to create some extra cash flow in 2024. However, there are easy ways, and out of the box ways. Today, we’re going to focus on the latter.
The Canada Revenue Agency (CRA) might be better known for taking money from Canadians through taxes. However, the CRA also has literal benefits that you can grab hold of as well. So today, we’re going to cover three, and how to use them.
Canada Workers Benefit
First up, we’ll look at the Canada Workers Benefit. This benefit is aimed at providing individuals and families with extra income if they earn a low income. That income comes in the form of a basic amount, as well as a disability supplement.
Each year, when you file your tax return you can claim this amount for the Canada Workers Benefit. From there, starting in July, you will be provided with advance payments equal to 50% of the Canada Workers Benefit across three payments.
The maximum benefit for the basic amount is $1,428 for individuals, and $2,461 for families. You will need to make less than $23,495 to claim this amount as an individual, and $26,805 as a family. If you claim the disability supplement, the maximum on top of this would be $737 for both individuals and families. Again, the full amount comes from making under $33,018 as an individual, and $43,210 as a family.
Canada Training Credit
This last benefit is clearly for those struggling to make ends meet. However, if you’re looking for some extra cash flow, it’s always a great idea to consider getting some extra training in your field. Whether it’s going back to school, or just taking an extra course, the CRA can also help get you there.
While you can claim everything from tuition and fees to books and online courses, there are some important points. The credit will be paid out based on your Canada training credit limit for the tax year, up to a maximum of $5,000, or 50% of eligible tuition and other fees for the year. Whichever is less.
This can vary, as you can only apply if you’re over 26 and under 66. Each year $250 is added to the credit, so a 26-year-old may only have $250 to work with. So make sure you look this up on your notice of assessment before spending too much.
Climate Action Incentive Payment (CAIP)
Finally, the climate action incentive payment (CAIP) is another bonus payment, and one really anyone can apply for! This is a tax-free payment for eligible individuals and families to offset federal pollution pricing. There is a basic amount, as well as a supplement for those in small or rural communities.
The only issue? Not every province or territory has this. So you’ll have to doublecheck that yours provides this payment. This will also help determine how much you can get. For instance, an individual can receive $122 in Ontario, but $193 in Alberta.
The funds then increase depending on who is in your family. A spouse adds on a significant amount of income, as well as children under 19. So again, make sure you find your exact scenario.
Bottom line
These benefits are great, but if you’re managing your finances well these days, I would take them and consider investing. However, if you’re really struggling financially I wouldn’t put it into anything risky. Instead, consider an exchange-traded fund (ETF) that follows the S&P 500 such as the Vanguard S&P 500 Index ETF (CAD-hedged) (TSX: VSP).
This Canadian-hedged ETF offers you exposure to the entirety of the S&P 500 for a fraction of the cost. What’s more you can grab a 1.3% dividend yield, with shares already up 7.3% year to date. So this would certainly be where I would put that money to work today.
Whatever you do, remember to meet with your financial advisor before making any significant financial decisions. While these benefits are easy to apply for, losing that money to stocks may not be the best option. So consider this ETF and your financial advisor’s advice first and foremost!
