Government Support and Helping Yourself

Government Support and Helping Yourself

If the 2020 coronavirus pandemic has taught us something, it is that many of our jobs are fragile and the government will only offer limited support. Businesses need to be prepared to deal with a sudden loss of revenue and adapt quickly.

If tragedy befell you in your personal life, what kind of support could you expect the government to give? The simple answer is that the government will give you just enough money to sustain basic living. The rest you would need to source from your own assets, your own insurance, or from friends and family.

The CPP Disability benefit is a taxable benefit available up to the age of 65 for severe and long-term disabilities. The benefit is based on how many years contributions have been made to the CPP and how much. There is also a benefit available for the children of a person who qualifies for the CPP Disability benefit.

Employment Insurance (EI) provides a sickness benefit for up to 15 weeks if unable to work due to sickness. To qualify, the person must have 600 hours of work at the job and apply within a short time of stopping work. It is a taxable benefit that only covers part of the salary. Insurance is also available, of course, in the event of a lay-off or loss of work for reasons other than being terminated for just cause. During the Covid 19 crisis, there are EI benefits available for anyone who has been unable to work for 14 days or more.

The Workers Compensation Board (WCB)  pays short term or long term benefits to people who are injured on the job. The payments are intended to cover up to 90% of a person’s after-tax income. Payments are reduced for any other insurance coverage or government benefits you may receive.

On death, CPP Canada will pay a one-time benefit of $2500 to the estate of the deceased. If the person was a CPP contributor, the surviving spouse and children could qualify for monthly support payments from the CPP.

Individual provinces also have their own long-term disability programs that are often asset tested. For instance, BC’s program only allows a person to have a primary residence, one vehicle, and up to $100,000 of savings apart from an RDSP or RESP account to be eligible.

In conclusion, it is best to combine reliance on government programs with your own insurance. This may be partly provided by your employer’s benefit plan, but it may also require buying your own. Most insurers, however, still require you to fund the first few months of loss of income, so you should have an emergency fund in any event.