What is the Canadian Federal Benefit Payment?

The good people of Canada contribute 15% of their income to fund the federal benefit payment plan. The funds are disbursed into splinter programs that include:

• Family Benefits
• Public Pensions
• Employment Insurance
• Education and Student Aid
• Disability benefits
• Housing benefits

Our focus will be on Employment Insurance and Public Pensions. For other federal benefit payment schemes, see here.

Employment Insurance

In Canada, losing your job doesn’t mean it’s the end of the world. There are many opportunities to get back on your feet, and while you look for work, the government provides temporary financial assistance. However, you have to be eligible to benefit from this federal benefit payment. Canada has a different type of income assistance, and this includes:

• Regular benefits

Regular benefits are for people who are not at fault for losing their jobs. The federal benefit payment they receive ensures they have the funds they need to take care of their bills and living expenses while searching for a new job.

• Special benefits

Special benefits include:

1. Parental and maternity benefits – for parents caring for a newborn or adopted child and for pregnant women.
2. Sickness benefits – for the sick and individuals in quarantine.
3. Compassionate care – for those who need to take care of a sick family member or loved one.

The amount of money you get depends on many factors. You can find out more information here.

Self-employed benefits

A self-employed individual can enjoy the federal benefit payment scheme through registration with the Canada Employment Insurance Commission. Self-employed Benefits are in 6 categories.

• Maternity benefits – women get up to 15 weeks because of pregnancy or after delivery.
• Parental benefits – Parents can get up to 40 weeks in standard benefits or 69 weeks in extended benefits.
• Sickness benefits – for those who cannot work because of illness, injury, or quarantine. They can get up to 15 weeks in benefits.
• Compassionate care – for caregivers who have no option but to care for a family or loved one. They can rack up to 26 weeks in benefits.
• Caregiver benefits – for individuals who have to care for ill or injured children below the age of 18. They can get up to 35 weeks in benefits.
• Family caregiver benefits for adults – for individuals who have to care for an injured or critically ill adult. They can get up to 35 weeks in benefits.

Self-employed individuals living in Quebec are automatically entitled to the benefits above courtesy of the Quebec Parental Insurance Plan.

Public Pensions for Seniors

Public pensions fall under the type of federal benefit payment that takes care of seniors. The federal government oversees tow major pension schemes:

• Old Age Security OAS (OAS). The OAS is calculated on the number of years spent living in Canada.
• Canada Pension Plan (CPP). The CPP is calculated on the number of years spent working in Canada and your contribution to the plan.

Old Age Security

OAS is seen by many as the cornerstone of the Canadian retirement income plan. Older Canadians consolidate the OAS with other programs like:

•  CPP pension
•  Private pension plans
• RRSPs; TFSA – savings
• SAFER, GIS – supplements

OAS is a fixed monthly benefit that everyone who applies for can get as long as they are eligible. You must be a citizen or legal resident who has stayed in Canada for 10+ years past the age of 18. 10 years gives you the base level benefit while individuals with 40+ years are entitled to full benefits.

Note – An older adult who doesn’t qualify through the residency requirement may still be eligible for a pension because Canada agrees with a few countries on social security.

You don’t need to quit working to receive the OAS federal benefit payment. Senior citizens may apply for the OAS when they get an OAS application form or six months before turning 65. Late applications will only entitle you up to 11 months of back pay, including the month you apply. However, this is on the condition that you meet all eligibility requirements.

If you weren’t born in Canada or you didn’t live in Canada consecutive since your 18th birthday, you’ll have to provide your proof of legal statuses like immigration documents or citizenship papers. You must also provide a statement of all the places you’ve been, the dates you left Canada, and the dates you arrived back. This requirement poses a difficult challenge for senior immigrants who intend to apply.

Guaranteed Income Supplement

GIS is an extra income benefit that’s paid monthly to those who already benefit from OAS without any additional streams of income. While OAS is taxable income, GIS isn’t. However, as an older adult, you must apply to benefit from GIS. It automatically renews after your application provided you file an Income Tax return each tax season.

The Allowance For The Survivor

The Allowance is extra cash that’s given to couples living on a single OAS/GIS. They must be between the ages range of 60-64. If the OAS/GIS beneficiary dies while the spouse is within the age of 60-64, they can qualify to receive the Allowance for the Survivor.

Note that if the surviving spouse remarries or enters into a common-law relationship, the Allowance will end.

Canadian Pension Plan

As an older adult, you can enjoy many other varieties of federal benefit payment. CPP is one of such benefits. We have three sub-categories under the Canadian Pension Plan, and they are:

• Retirement pension
• Survivor benefits
• CPP disability

However, we are only going to focus on the retirement pension as it provides additional income to working Canadians who are retired. CPP is unique in that the more money you put in while you’re working, the more money you get when you’re retired. To be eligible for CPP, you must have contributed to the scheme and:

• You’re within the age range of 60-64 and have a low income, or have stopped working.
• You’re 65+ years old.

If you begin to receive your payments at the age of 60, your rate will remain the same even when you turn 65. However, if you continue to work at 65, you’ll still receive your CPP benefits while working.

Individuals can choose to contribute their funds to the CPP until they reach the age of 70. Making this contribution ensures they received more substantial retirement benefits. All older adults must apply for CPP. Remember it’s taxable income.

If you change jobs or move to a different province, your CPP rights remain the same. If you retire to another country, you can apply and receive your benefits from there.