It is that time of the year again, so this information could be of benefit to your senior clients and family members.
Filing your taxes is one of the most important steps to maintaining a healthy financial life as a senior. While things like credit scores, personal loans, and debt repayment, are likely concerns of the past. Income taxes and government credits and benefits are a new priority.
Once you reach the age of 65, you become eligible for a few tax benefits that were not available to you when you were younger. Once seniors retire, their income decreases, especially if they did not have a strong pension plan from their employer. Along with tax benefits available to all Canadians, tax credits for senior citizens make a huge difference in allowing seniors to save more money on their taxes.
Federal Tax Credits and Benefits For Seniors In Canada
There is a wide range of tax credits and benefits available to Canadian seniors. Make sure you consider all of the following options when filing your taxes every year.
Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) Benefits
Most Canadians contribute to the Canada Pension Plan throughout their working life. The CPP is a monthly benefit or credit that replaces a portion of your income when you retire. You must be at least 60 years old and have made a minimum of one valid contribution to the CPP to qualify. Although the amount of money you can earn depends on a variety of factors.
The Quebec Pension Plan (QPP) gives citizens living and working in Quebec basic financial protection if they retire, die, or develop a disability. You can apply to QPP only if you live in Quebec, or if the last province you lived in was Quebec.
Retiring Allowance
Retiring allowances are sometimes included as a portion of a severance package, which is given to an employee upon termination of their employment. They can include the following:
Payments for unused sick credits upon termination
Disability Tax Credit
To be eligible for the disability tax credit, proof from a qualified individual is required. They must declare that a severe mental or physical impairment is present. And that it significantly impedes the ability to perform a basic activity of daily living. Some examples of restricted activities due to disability include speaking, walking, hearing, eating, dressing, and more.
Medical Expense Tax Credit
The medical expense tax credit, or METC, is meant for individuals who pay significant amounts of money in medical expenses for themselves, their spouses, or dependents. Some examples of medical expenses that qualify include dental services, nursing home services, ambulance services, and travel expenses. There are also certain devices whose cost qualifies, including hearing aids, dentures, prescription drugs, orthopedic shoes, gluten-free foods, wigs, and more.
Home Accessibility Tax Credit (HATC)
The Home Accessibility tax credit is a credit given for expenses incurred in home renovations or alterations that allow an individual to gain access to or be mobile in their home or reduce the risk of harm to the individual within their home. Some examples of qualifying expenses include the costs of renovations to allow for grab bars, handrails, walk-in tubs, widening doorways, and lowering cabinets.
The credit allows you to claim up to $10,000 in expenses and usually results in a non-refundable credit of 1,500 per year. Any work done by professionals such as plumbers, architects, contractors, and more are eligible expenses, as are building materials, fixtures, permits and equipment rentals if you do the work yourself.
Old Age Security (OAS) pension
The Old Age Security Pension is given to any Canadian over the age of 65 years old. A taxable benefit, this pension is calculated depending on how long you lived in Canada.
Guaranteed Income Supplement
The guaranteed income supplement is given to some Canadians who also receive the old age security pension if their income is below a certain threshold. For example, if a citizen’s income is below a yearly set limit as a single person, they are eligible for this supplement. This supplement is also given if a citizen’s income plus the income of their spouse or partner is below a yearly set limit. For more information about the guaranteed income supplement and eligibility, visit the CRA’s website.
Allowance For The Survivor
This benefit is available to citizens between the ages of 60 and 64 with low income, and whose spouse has died. This tax credit ends once you turn 65 and is replaced with the Old Age Security Pension.
Provincial Tax Credits And Benefits For Seniors In Canada
In addition to the federal tax benefits described in the section above, there are also some province-specific tax credits available to seniors.
Ontario Trillium Benefits (OTB) – Ontario Senior Benefits
Only available to citizens in Ontario, the Ontario Trillium Benefit combines three tax credits to assist in paying for energy costs and sales and property tax. To apply, you need to be eligible for at least one of the three combined credits:
70% grant of your rent costs – Quebec Senior Benefits
For seniors in Quebec, the government offers a basic amount of money to help cover the costs of renting a private senior residence. If you are 70 years of age or older, you can receive up to a 70% grant of your rent costs. Dependent seniors can receive up to 80%.
Tips On Reducing, Deducting Or Deferring Your Taxes
Even as a senior, your income from tax credits and benefits is taxable. Here are some helpful tips for reducing the amount you pay in taxes.
Registered Retirement Savings Plan (RRSP)
Usually created in preparation for retirement, income from RRSPs is exempt from taxes as long as it remains in the fund. To avoid higher tax brackets, make sure you limit how much you take out each year. Try your best to rely on income received through your employer’s pension plan. As well as Canadian and provincial tax credits. This will help you avoid taking out more money from your RRSP each month, and in turn avoid paying more taxes on it.
Pension Income Splitting
Pension income splitting can help you save on the amount of income tax you need to pay. Upon meeting a few requirements. You could be eligible to split a maximum of 50% of your income with your spouse or partner. Thus, reducing the amount of income tax you pay each year.
Carrying Charges and Interest Expenses
Remember to claim all carrying charges and interest expenses that you had to pay in order to earn any income from your investments. This includes expenses incurred for investment advice, as well as for paying anyone to manage your investments.
Final Thoughts
Retirement can be a stressful time for seniors, as it often results in a decrease in income. Make sure you are well informed on all of the available government benefits for seniors. This way you can maximize your income and deductions on your income tax.
Canadian Dental Care Plan
The Canadian Dental Care Plan (CDCP) will help ease financial barriers to accessing oral health care for eligible Canadian residents with an annual adjusted family net income of less than $90,000 who do not have access to dental insurance.
Applications will open in phases starting with seniors. Find out when you can apply .
Do you qualify
Determine if you are eligible for the CDCP.
How to apply
Applications for the CDCP will open in phases. Find out when you can apply.
When can you visit an oral health provider
CDCP coverage start date will vary for each person who qualifies for the CDCP.
What services are covered
See examples of what oral health care services may be covered. You will not have to pay the full cost out of your own pocket.
How oral health providers enrol in the CDCP
Information for oral health professionals who would like to enrol as a participating CDCP provider.
The last of the baby boomer generation will be turning 65 in 2030, marking a pivotal moment in a demographic squeeze that has loomed over Canadian workplaces for years. By then, most of this generation will be retired – and the labour market will face a new reality.
“A big group of people that have a lot of experience and have seen a lot and [carry] a lot of wisdom will exit our labour market,” says Rafael Gomez, a professor and director of the University of Toronto’s Centre for Industrial Relations and Human Resources who has researched aging demographics in the working population extensively.
Presently,one-third of workers in Canada are millennials, with Gen Xers close behind at 29.5 per cent, and the younger Gen Z ringing in at 17.6 per cent. However, Gen Xers have been routinely passed over when it comes to promotions – meaning their experience levels may not completely fill the void left by retiring boomers. They are also vastly outnumbered by younger generations.
This, says Mr. Gomez, may cause the labour market to lose its delicate balance – with some industries facing more dramatic upheavals than others. At last count, there were around 700,000 unfilled jobs in the country, most notably in food services, health care, social services and construction.
Mary Van Buren, president of the Canadian Construction Association (CCA), says the construction industry alone currently has about 61,000 vacancies.
“We expect about 245,000 retirements by 2032 and around 240,000 people to replace those,” says Ms. Van Buren. With a shortfall of 5,000 from retirements and the current 61,000 vacancies, she estimates the industry has about 66,000 roles to fill in the immediate future. “We have a huge recruitment job to do.”
It is the same across the skilled trades. With around 700,000 skilled trades workers expected to retire by 2028, the Canadian Apprenticeship Forum estimates an average of 75,000 new apprentices will need to be hired per year over the next five years to meet the demand for skilled journeypersons in Red Seal trades . The trades most at risk of not meeting that demand include welder, industrial mechanic, bricklayer, boilermaker, cook and hairstylist.
Ms. Van Buren says one of the challenges of filling these roles is the perception of skilled trades. “Most of us went through school and were told that university is the desirable career path,” she says. “A lot of shop classes were eliminated in high schools and with the Federal government immigration pointing system, higher education equals higher points.”
Ms. Van Buren says there is a serious concern about filling these roles at a critical time for growth in infrastructure across Canada. But it is not just the ability of organizations to hire the talent they need. The boomer exodus is also creating an imbalance between experience and technical innovation.
Mr. Gomez says younger generations tend to come in with a better grasp on emerging technologies and ideas on moving organizations into the future, while older generations have insight and institutional memory that can better predict the failure of an idea. Both are necessary, says Mr. Gomez – but, as his research shows, they need to be balanced.
“You don’t want tons of people who are just in those positions saying no to every new idea because occasionally those ideas are different,” says Mr. Gomez. “On the flip side, an economy or an organization that doesn’t have enough gatekeepers might just spit out ideas that can cause an organization to fail.”
In the case of baby boomers retiring, Mr. Gomez says it is going to affect organizations disproportionately.
Larger and more established companies will likely feel the demographic crunch more sharply. These types of companies tend to require more senior leadership roles and managers and often have to invest a lot more in training staff. “Older workers tend to be found in careers that have longer career paths – public service, education, health and large corporations like banks and telecom,” says Mr. Gomez.
Newer companies and startups will be less affected, says Mr. Gomez, because they tend to hire younger and newer entrants into the workforce who already have a better understanding of technology.
With growing job vacancies in former boomer strongholds, holding up the labour market – and legacy companies – will fall on Gen Xers and elder millennials. To head off looming disruptions, now is the time for those workers to get upskilling, retraining and advancement.
“Maybe at the very end of their careers, they can assume some of these roles that were denied them just by the sheer numbers and the demographic weight of that baby boom generation,” he says. “[They could] fill that gap of experience that’s needed to still manage corporations, especially larger organizations.”
Editor’s note: An earlier version of this article erroneously cited ‘245,000 retirements by 2023’. The correct information is ‘245,000 retirements by 2032.’
Many people grapple with the winter blues as winter settles in with its chilly winds and shorter days. The cold weather and lack of sunlight can contribute to feelings of isolation and lethargy. However, there are several strategies to leverage to help beat the winter blues and embrace the season with positivity.
1. Embrace indoor hobbies: Whether reading, crafting, painting, or learning a new skill, having a hobby can provide a sense of accomplishment and ward off boredom.
2. Stay active: Physical activity is crucial for mental well-being. Activities such as walking, yoga, or tai chi can help boost mood and increase energy levels.
3. Stay social: While inclement weather can make in-person get-togethers more challenging, virtual platforms are a great way to stay connected with friends and family. Video calls, online games, or even virtual book clubs can provide social interaction and combat feelings of loneliness.
4. Mindful relaxation: Winter is an excellent time to practice mindfulness and relaxation techniques. Guided meditation, deep breathing exercises, or simple relaxation rituals can help reduce stress and improve overall well-being.
5. Healthy eating: A balanced diet plays a crucial role in mental and physical health. Consume various nutritious foods, stay hydrated, and incorporate mood-boosting nutrients like Omega-3 fatty acids found in fish.
Instead of viewing winter as a season to endure, we can shift our mindset and celebrate its unique qualities. Whether savouring seasonal foods or relishing the beauty of snowfall, finding joy in the winter experience can shift perspectives.
Incorporating these strategies into your routine can beat the winter blues by embracing the season with a positive mindset. Doing the things that nourish your mental and physical well-being all year round is essential, but even more so in the depths of winter.
A Guide on Stocking Up on Non-Perishable Foods
As the winter months approach, it is essential for older adults to be well-prepared for inclement weather that might make it challenging to get out and about. One crucial aspect of winter preparedness is ensuring you have an ample supply of non-perishable food items – these are items that can be stored for a long time before being eaten or used. In case of extreme weather conditions or unexpected events, having a well-stocked pantry can provide comfort and security. Here is a comprehensive guide to help you prepare:
1. Water and Basics:
Start by ensuring you have enough water to last at least three days. Aim for one gallon of water per person per day.
Stock up on the basics: milk (shelf-stable or powdered), bread, and cheese. These items can form the basis of simple and nourishing meals.
2. Canned Goods:
Canned goods are a lifesaver during emergencies. Consider having a variety of canned items, such as soup, tuna, and salmon. These are not only easy to store but also have a long shelf life. Include canned fruits and vegetables to ensure you are getting essential vitamins and nutrients.
3. Eggs and Dairy Alternatives:
Eggs are a versatile and protein-rich option. Consider powdered eggs as a convenient alternative with a longer shelf life.
Explore dairy alternatives like long-lasting UHT (ultra-high temperature) milk or non-dairy options if you have specific dietary preferences.
4. Beverages:
Do not forget about warm beverages. Stock up on tea and coffee to keep you cozy during chilly days. Hot beverages can also be a source of comfort. Consider having powdered drink mixes that can be easily mixed with water.
5. Staples:
Peanut butter is a nutritious and energy-dense food that can be a quick and satisfying snack. Cereals and crackers are excellent options for quick and easy meals. Choose whole-grain varieties for added nutritional benefits.
6. Dried Fruits and Nuts:
Dried fruits and nuts are not only delicious but also packed with essential nutrients. They make for convenient and healthy snacks.
7. Frozen Meals:
Plan ahead by stocking up on 2-3 frozen meals that you can easily pop into the microwave or oven. Circle of Care offers convenient meal options; current Circle of Care clients can reach out to our Meals on Wheels team at 416-373-4100 to learn more about ordering extra meals. New clients can book an intake appointment here: https://www.circleofcare.com/meals-on-wheels/.
8. Meal Preparation:
Consider preparing and freezing a few homemade meals in advance. This way, you will have a supply of nutritious and familiar dishes ready to heat and eat. And if you are a caregiver for a senior who lives on their own, consider bringing over a few prepared meals that they can stick in their freezer and take out to eat when needed.
9. Check Expiry Dates:
Regularly check the expiry dates of your non-perishable items and replace any that are approaching expiration. This ensures that your emergency supplies are always fresh and safe to consume.
By taking these steps to stock up on non-perishable food items, you will be better equipped to face unexpected winter challenges. Remember, being prepared is not just about the physical supplies but also about having peace of mind knowing that you have everything you need to weather any storm.
