Due to higher interest rates, increased inflation and the rising costs of the basics, families all across Canada are feeling the squeeze. This is especially painful for our seniors on a fixed income. There are two ways that inflation hits a retirement portfolio.
First you withdraw more to meet the higher priced living expenses and second the central banks increase interest rates, which pushes down share prices and reduces the value of equity portfolios. The net effect is retirees are forced to withdraw increasingly larger amounts from a constantly shrinking asset base. So, now what?
As part of the 2023 Budget, the Canadian Government introduced a new grocery rebate which is scheduled to be issued on July 5, 2023. The CAIP (Climate Action Incentive Payment) will also commence in July for our Atlantic provinces something the rest of the country should have received in April of this year.
So, let’s talk about these two new benefits…
First, the grocery rebate will be the equivalent to double the GST/HST credit amount and the July 5, 2023, credit payment will be based on your 2022 tax return. If you are single with no children your maximum benefit will be $234. If you are a single parent, the benefit will depend on how many children you have. Here is the breakdown: $387 for 1 child, $467 for 2 children, $548 for 3 children, and $628 for 4 children. If you are married (or have a common-law partner) your benefit would be $306 with no children, but if you have children you would be entitled to the same benefits as a single parent. Here is the breakdown for
married parents with children: $387 with 1 child, $467 for 2 children, $548 for 3 children and $628 for 4 children.
The second government benefit to come out this month is the CAIP-federal fuel charge available only to Newfoundland, Labrador, Nova Scotia, and Prince Edward Island residents. Payments can be expected to be received in 3 initial instalments: July 2023, October 2023 and in January 2024. The CAIP is a tax-free amount paid out to Canadians to help residents offset the cost of the federal pollution pricing. It was made available to residents in Alberta, Saskatchewan, Manitoba, and Ontario last year in July 2022.
Over the course of the summer, I want to give you weekly tips, tricks, and tangible advice that you can use to save money. We are going to hit those topics that everyone wants advice on: how to earn more income, how to restructure and pay off debts, how to create smart budgets to overcome higher prices, and of course, how to create a sustainable financial future on any income. Don’t worry, you can still use this economic market situation to your advantage to profit right now and in the future. Stay with me – see you next week.
Good Luck & Best Wishes,
ATML - Christine Ibbotson
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