Tax Measures Under Canada’s COVID-19 Economic Response Plan

In recognition of the volatility in stock market conditions, the Response Plan also includes a measure to reduce required minimum withdrawals from Registered Retirement Income Funds (“RRIFs”) by 25% for 2020, to provide flexibility to annuitants who might otherwise be forced to liquidate investments to meet minimum RRIF withdrawal requirements. The Response Plan also notes that similar rules will apply to individuals who are receiving variable benefit payments under defined contribution registered pension plans.

While the Response Plan contemplates expanding the tools that the Canada Mortgage and Housing Corporation (the “CMHC”) and other mortgage insurers offer to lenders to increase flexibility for homeowners to defer mortgage payments on CMHC-insured mortgage loans, there is no suggestion that the Government of Canada intends to introduce measures to defer repayments of amounts withdrawn from registered retirement savings plans under the homebuyers’ plan.

During the week of July 6, 2020, seniors eligible for the Old Age Security (“OAS”) pension received a one-time, tax-free payment of $300 plus an additional $200 for seniors eligible for the Guaranteed Income Supplement. Guaranteed Income Supplement (“GIS”) and Allowance payments are temporarily extended for seniors whose 2019 income information has not been assessed. Seniors are encouraged to submit their 2019 income information as soon as possible and no later than October 1, 2020 to avoid an interruption in benefits.

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