- New Canada Caregiver Tax Credit
- Should You Defer Your Old Age Pension?
The Government of Canada has created a new Canada Caregiver Tax Credit. Do you qualify?
What is the Canada caregiver credit?
Do you support a spouse or common-law partner, or a dependant with a physical or mental impairment? The Canada caregiver credit (CCC) is a non-refundable tax credit that may be available to you. A doctor’s note is required.
Who can you claim this tax credit for?
You may be able to claim the CCC if you support your spouse or common-law partner with a physical or mental impairment.
You may also be able to claim the CCC for one or more of the following individuals if they depend on you for support because of a physical or mental impairment:
- your or your spouse’s or common-law partner’s child or grandchild
- your or your spouse’s or common-law partner’s parent, grandparent, brother, sister, uncle, aunt, niece, or nephew (if resident in Canada at any time in the year)
An individual is considered to depend on you for support if they rely on you to regularly and consistently provide them with some or all of the basic necessities of life, such as food, shelter and clothing.
You may qualify for the Canada Caregiver Tax Credit.
As of July 2013, you can defer receiving your Old Age Security (OAS) pension for up to 60 months (five years) after the date you become eligible for an OAS pension in exchange for a higher monthly amount. If you delay receiving your OAS pension, your monthly pension payment will be increased by 0.6 percent for every month you delay receiving it, up to a maximum of 36 percent at age 70.
Deferring your old age pension for one year:
Michael turned 65 in July 2013. If he decides to delay receiving his OAS pension for one year, his monthly amount will increase by 7.2% (0.6% x 12 months) to account for the 12-month deferral period from August 2013 to July 2014.
If Michael’s entitlement is $549.89 per month, his increased monthly payment would be $589.48.
Deferring for five years:
Rita will be turning 65 in December 2013. If she decides to delay receiving her OAS pension for the maximum deferral period of 60 months, her monthly amount will increase by 36% at age 70 (0.6% x 60 months).
If Rita’s entitlement is $549.89 per month, her increased monthly payment would be $747.85.
Would deferring your pension benefit you? Contact us today to learn more.
Should you defer your pension?