This pandemic has brought tough times for all. Everyone is struggling in their own way with reduced income, universities closed, no jobs, and many are facing pay cuts. The Canada Revenue Agency (CRA) has made every possible effort to help individuals overcome the COVID-19 crisis. It has provided benefit payments for all age groups from students to working professionals to retirees to families with children.
If you are a student or have recently graduated high school or post-secondary school, you can get up to $7,000 in monthly benefits from the CRA.
You can also delay your student loan payments until September 30 without accruing interest.
In April, Prime Minister Justin Trudeau announced the Canada Emergency Student Benefit (CESB) to help students who are unable to work because they fell sick, are quarantined or are caring for others. The benefit also extends to students who lost their job loss, are unable to find work, or have a job that is fetching them less than $1,000 a month.
If you are earning up to $1,000 per month, you can apply for the CESB and get $1,250 in benefit payment.
Your CESB payment can go up to $2,000 if you have dependents or a disability. If you volunteer for national service, you can earn up to $5,000.
All this adds up to $8,000 per month, which is sufficient to fund your living expense and even build some savings for the future, as the CESB won’t last long.
Although, the benefits the CRA is giving you now will be taxed in the 2020 tax year. When you file your income tax return in April 2021, the CESB payment will be added to your taxable income.
You can leverage this time and earn the tax amount due next year by investing some portion of the $8,000 in dividend stocks.
You still have two months before your CESB ends. If you manage to save $3,000 from your CRA benefits every month, buy dividend stocks through your Tax-Free Savings Account (TFSA).
You can use the dividend money to pay the tax amount.