GIS and CERB, plus CAI update
The Climate Action Incentive CAI payments for 2022 have been announced. They are about 15% higher than they were a year ago. And for 2022, the payments will be made throughout the year. There is more information at the end of this article.
One-Time GIS Payment for Seniors Affected by CERB
First, I want to share the recent government announcement that affects many low-income working seniors.
The announcement from the federal government came on March 3, which said it is providing one-time payments to Guaranteed Income Supplement (GIS) recipients who received pandemic benefits in 2020 and faced a reduction or loss of GIS benefits from July 2021 to June 2022.
Payments will be delivered automatically by direct deposit on April 19, or by cheque by the end of the month.
If you were a working senior receiving the Guaranteed Income Supplement and during 2020 also received CERB due to loss of job, watch for this unexpected payment. You’re being reimbursed for what you lost.
Many seniors over the age of 65 years are still working (as employees or self-employed) to supplement their income. These seniors who continue to work, can earn up to $5,000 without any effect on their GIS. If you earn $5,000 to $15,000 the GIS is reduced but not as significantly as regular income from interest or pension or registered income funds.
When CERB came out in April 2020, a lot of working seniors applied because they lost their jobs and their income. Unfortunately, CERB was not treated the same as employment income when the Guaranteed Income Supplement was recalculated July 2021.
When will the repayment be received?
The payment is scheduled for April 19, 2022 and will include repayment of GIS from July 2021 to June 2022. Regular GIS payments will resume July 2022. This special payment will be non-taxable and non-reportable.
The payment will not affect eligibility for income support programs, such as what you pay for provincially subsidized housing.
Climate Action Incentive Payment
The CAI payment will be 15% higher than a year ago. For an individual, last year it was $360. Starting July 2022, it will be $416 per year, paid in quarterly installments. The April 2022 payment will be combined with the July 2022 payment.
Those of you that receive GST credits will be familiar with receiving government benefits on a quarterly basis. The CAI will be paid quarterly much like the GST credit.
The additional CAI payment for a spouse is $208 and for each child under 18 is $104. For example, a family of four in Manitoba will receive $832 for the year: $416 July 2022, $208 October 2022, and $208 January 2023. Plus, those us living farther from Winnipeg, will receive an extra 10%. This family of four will receive $915 for the year.
In previous years, the CAI was part of your refund (or reduced your taxes owing). We remind our clients as we file the tax returns for 2021, that your refund is less than previous years in part because the CAI will now be paid to you throughout the year. Many taxpayers are disappointed with the amount of their refunds this year.
Adjust Tax Deducted
Some taxpayers now have taxes owing for the first time in years or ever. We are helping them increase some tax deducted on one or more of their government pensions so when we file their taxes a year from now, they may have a small refund again.
Some taxpayers will decide not to pay the amount they owe that is due May 2 and will instead have CRA take the amount owing from their upcoming GST quarterly payments or from the new CAI quarterly payments that start July 2022.
Deadline May 2
A reminder to have your taxes filed by the due date May 2 (April 30 is a Saturday). This is especially important if you owe. And many of you will owe this year for the first time! If you file late, the penalty is 5% of what you owe, plus 1% for each month you are late.
Taxpayers that include business or farm income on their tax returns have until June 15 to file without any penalty. This applies to their spouses too. If you have an amount owing, the interest does start May 2, but many self-employed taxpayers prefer to file between May 2 and June 15. And us tax preparers prefer that too. We have so many clients that really do need to be filed by May 2.
Anni Markmann is a Personal Income Tax Professional and Certified Financial Planner; living, working, and volunteering in our community. Contact Ste Anne Tax Service at 204.422.6631 or 36 Dawson Road in Ste Anne (near Co-op) or firstname.lastname@example.org