The devastation of the coronavirus outbreak is so massive that economies are screeching to halt, and millions of people are losing jobs and income. COVID-19 is both a health and financial threat to Canadians. The lockdown and stay-at-home directives helped contain the spread of the virus.
Fortunately, the federal government was quick to the draw in anticipation of financial hardships. The budget for the COVID-19 Responses Plan is expensive but necessary. There are federal aid programs that are all COVID-19 related. The minimum you could receive to keep you financially stable throughout the pandemic is $12,400.
The COVID-19 breaks begin with the flagship program, the Canada Emergency Response Benefit (CERB). An individual who lost income and employment or who is working fewer hours can receive $12,000 in CERB payments. The Canada Revenue Agency (CRA) disburses $500 per claimant for up to 24 weeks.
Another beneficial break is the Goods and Services Tax (GST) credit. Since April 9, 2020, the CRA has been issuing a one-time supplementary GST credit payment. For a single individual and couples, the average credit is almost $400 and $600. Add the maximum CERB, and your financial support is $12,400.
Aside from the CERB and the one-time supplementary GST credit, there’s a special top-up of the Canada Child Benefit (CCB). Parents already receiving the CCB for 2019-20 were given an extra $300 per child on top of the regular May 2020 payment. In July 2020, the CCB payments are higher with the enhancements in the 2020-21 benefit year.
The icing on the cake goes back to CERB. There’s no limit to the number of recipients in one household. If both husband and wife lost their jobs due to COVID-19, each spouse is eligible to receive CERB. Thus, the remuneration per family can increase to $24,400, at least. You’ll have a small fortune in your hands with the CRA money.
Dividend stocks and CERB have striking similarities. Both provide income, except that the latter has a pre-determined period, while the former can deliver financial support for a lifetime. Bank of Nova Scotia (TSX:BNS)(NYSE:BNS), or Scotiabank, is a core holding of many Canadian retirees, because it provides a stable and life-long income.
The recent market selloff brought down the stock price, which makes it a bargain deal for income investors. This bank stock at a ridiculously low price of $58.24 per share (17% discount) but yields a fantastic 6.18%. Assuming your initial investment is $25,000, the corresponding earning is $1,545.
Scotiabank is a formidable banking institution with a mean dividend track record of 188 years). The bank has gone through the worst of times and the deepest recession. Profitability would be weak in the ensuing quarters because the credit-loss provision will have to remain. Likewise, the low interest rate environment will impact margins.
The most significant lifeline in the health crisis is winding down. Your beloved CERB will run out after August 2020, and recipients are moving to the EI system. A permanent CERB would have been ideal but is not meant to be. But dividend stocks are the best alternatives if you want perpetual income.
The post CRA Wealth: How You Can Receive $12,400 in COVID Breaks in 2020 appeared first on The Motley Fool Canada.
- Warren Buffett: A Perfect Storm Is Coming
- Worried the CRA CERB Will Be Gone? Then Get $2,000 Every Month Here
- 6 Recent IPOs That Could Turn $6,000 Into $60,000
- Top TSX Stocks for August 2020
- How to Get Up to $850 in CRA Cash Benefit in One Simple Step
- Two New Stock Picks Every Month!
Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA.
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2020