If you’re raising children younger than 18, you may be entitled to monthly support
Of all the challenges that come with parenting, the financial challenge can be the hardest to overcome. Fortunately, if you’re raising children in Canada, the government may offer you monetary assistance in the form of the Canada Child Benefit.
Canada Child Benefit Basics
The Canada Child Benefit (CCB) is a tax-free monthly payment from the Canada Revenue Agency (CRA) meant to help low- to moderate-income families defray the costs of raising children. The CCB began in July 2016 as a replacement for the Canada Child Tax Benefit, the National Child Benefit Supplement, and the Universal Child Care Benefit. It is the most recent and generous incarnation of a program launched in the early 1990s to end child poverty in Canada.
Since July 2018, the CCB has been indexed to the cost of living, meaning that an increase in the cost of living automatically triggers an increase in the CCB amount.
To be eligible for the CCB you must live with a child under the age of 18 whose care and upbringing you are primarily responsible for, and you must be taxed as a resident of Canada. Additionally, either you or your partner must be a Canadian citizen, an Indigenous person, a permanent resident, a protected person, or a temporary resident who meets certain criteria.
If you share custody of your child, and your child spends roughly equal amounts of time at both households, each parent may be entitled to half the CCB payment. In this case, payment will be calculated based on each parent’s own adjusted family net income (AFNI).
How Much Do You Receive?
The amount of your CCB is based on last year’s income and is recalculated every July. For example, your AFNI from 2020 determines how much you’ll get in CCB from July 2021 to June 2022. If your income changes in 2021, it won’t affect your CCB payments until at least July 2022.
The maximum benefit per child is:
- $6,833 per year ($569.41 per month) for children under 6.
- $5,765 per year ($480.41 per month) for children between 6 and 17.
If your 2020 AFNI is:
- less than $32,028, you will receive the maximum benefit.
- between $32,028 and $69,395, your benefit will be reduced by 7% of your income over $32,028
- more than $69,395, your benefit will be reduced by $2,616 plus 3.2% of your income over $69,395.
To find out exactly how much you should receive, use the Child and family benefits calculator at Canada.ca. You can find the Canada Child Benefit application form online.
CCB Young Child Supplement
To provide extra support during the COVID-19 pandemic, the Canadian government introduced the CCB young child supplement (CCBYCS) in 2021. A family’s net income must be $120,000 or less to qualify for the full 2021 CCBYCS. Families who qualify will receive four additional payments of up to $300 per child younger than 6 over the course of the year. Families with a net income of more than $120,000 will receive half that amount, or $150, for each child under age 6. Families do not have to apply for the CCBYCS separately, but they must have filed their 2019 and 2020 tax returns.
The CCB is tax-free money with no strings attached for parents raising children in Canada. If you think you might be eligible, it’s worth applying. In addition, some provinces and territories may offer additional resources to help you raise your family. The benefits may be added to the CCB or paid out separately. Visit the CRA website to find out more.
Contact us today at email@example.com or 647.349.7070 to get the conversation started.
A divorce is one of the most difficult transitions you can go through. When you add uncertainty about money, that transition can get even more stressful. Here are six steps to help keep your finances intact during—and after—a divorce:
Step 1. Assess your finances and make a budget
As divorce proceedings get underway, take stock of your finances. Start by reviewing your income, retirement accounts, investment portfolio, and insurance policies. Next, make a budget that reflects your income and projected monthly expenses. Include both your personal debts and debts you share with your soon-to-be ex-spouse. Make sure to factor in expenses such as finding new housing or buying a car on a single income. Identify gaps in your budget where you come up short and see where you can make cuts to cover the difference.
Step 2. Target shared debts first
Debt on joint accounts can be problematic. Whatever your divorce agreement says, creditors will continue to consider both of you liable for the shared debt. Keeping those accounts open may pose problems later if your former spouse falls behind on payments. Paying off those debts pre-divorce can help avoid those issues.
Step 3. Divide assets thoughtfully
You and your former spouse may agree about dividing shared assets equally. But if you’re trying to protect your finances, there’s more to consider than the relative size of each party’s share—namely, tax implications and liquidity needs.
If the two of you will be in different income brackets post-divorce, consider the tax implications of holding on to various shared assets. For example, some retirement funds are after-tax accounts, meaning taxes were paid on contributions, and eligible withdrawals will be tax-free. Others are pre-tax accounts, meaning you will owe taxes on withdrawals. For assets that come with tax obligations, the higher-earning spouse will likely take the greater tax hit from keeping them. On the other hand, the lower-earning spouse may have a harder time paying the taxes. Weigh factors like these carefully.
You may also find that you and your ex have different liquidity needs. If you own a house together, for example, carefully consider liquidity when deciding whether either of you will keep it. If one of you needs access to the equity tied up in the house, it may make sense to sell it. Alternatively, you could decide one person will get the house while the other takes a larger share of liquid assets.
Step 4. Review your retirement goals
The costs and financial changes that come with divorce can set back your retirement plan. Check to see how the terms of your divorce may alter your path toward your retirement goals. For instance, you may find that pushing retirement back by a few years gives you more financial flexibility. Also, consider upping your contributions to retirement plans such as 401(k)s and IRAs. If you’re age 50 or older, the IRS allows you to make additional “catch up” contributions to save even more toward retirement.
Step 5. Revise your will and other documents
In general, a divorce won’t automatically remove a former spouse as the primary beneficiary of your estate and other assets. Designate new beneficiaries for your estate, life insurance, annuities, and retirement accounts. Depending on your state’s laws, you may have to wait until the divorce is finalized to make these changes. You will also likely need to make changes to your health care proxy and financial power of attorney.
Step 6. Make a Plan B
If your divorce agreement states your former spouse must make alimony or child support payments to you, prepare for the possibility that they will fail to pay or pay late. Keep money in an emergency fund to cover expenses, such as childcare, in the event your ex-spouse fails to pay. Also, ask your lawyer about ways to guard against nonpayment in the divorce agreement.
 Source: Consumer Financial Protection Bureau: https://www.consumerfinance.gov/ask-cfpb/i-am-divorced-and-getting-calls-about-a-debt-that-is-no-longer-my-responsibility-under-the-divorce-decree-or-property-settlement-agreement-can-a-debt-collector-try-to-collect-this-debt-from-me-en-1413/
 Source: Internal Revenue Service: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributions
 Source: CNBC: https://www.cnbc.com/2018/04/16/out-of-date-beneficiary-designations-are-a-common-and-costly-mistake.html
The Unique Advantages of Health Care Spending Accounts
These accounts can pay you back for qualified health care expenses
A health care spending account (HCSA), also known as a health spending account (HSA), is an employee benefit that offers reimbursement for eligible health care expenses. These accounts can help supplement existing coverage and fill in the gaps where public health insurance falls short.
What is a Health Care Spending Account and how do I qualify?
The public health care system in Canada offers coverage for most medical expenses but not everything. Many health care services, like dental or vision care, are not covered by the system, and some Canadians opt for private insurance to cover these costs. This type of private insurance is rarely a benefit an employer can offer, especially if they are a small business.
Instead, many Canadian employers offer health care spending accounts that reimburse employees for health care expenses not covered under the provincial health insurance plans. HCSAs allow employers to offer employees money to pay for out-of-pocket health care expenses, like dental services, eyeglasses, or hearing aids. Eligibility is generally determined by the employer, but an employee must work at least 20 hours a week to qualify.
How do HCSAs work?
HCSAs are typically offered by employers as either part of a benefits package or on a stand-alone basis. They also offer certain financial advantages. Employers fund HCSAs on a monthly basis, and the money they contribute to the account is tax-deductible. Withdrawals are tax-free for employees as long as they spend them on eligible medical expenses.
An employee’s access to the money left over in the account at the end of the year depends on the plan their employer offers. Employers typically have three options for handling unused balances, including:
- Balance carry forward. With this plan design, unused balances at the end of the first year can be carried over, but unused funds left in the account for more than two years go back to the employer. This option allows employees to plan for large medical expenses over a two-year period, giving them ample time to use their HCSA funds.
- Expense carry forward. This option allows for expenses that remain unclaimed at the end of the benefit year to carry forward and be reimbursed with the next year’s funds. Unused funds, however, are returned to the employer at the end of the benefit year. This option offers employees flexibility, especially if they incur a large unexpected medical expense.
- No carry forward. This is essentially a “use it or lose it” design that does not allow unused balances or expenses to be carried over into the next benefit year. For employers, this plan design is straightforward and simple and works well as a one-time benefit or reward for employees.
What medical expenses are eligible for a HCSA?
Employees do not have to pay taxes on withdrawals for eligible medical expenses. The Canada Revenue Agency (CRA) determines what is considered an eligible expense, such as:
- Vision care, like eyeglasses, contact lenses, or laser eye surgery
- Prescription drugs not usually covered by Extended Health Care plans, such as fertility treatments
- Massage therapy
- Adult orthodontics
There are some medical-related expenses that aren’t covered, such as:
- Premiums for public health services
- Services from nonqualified medical practitioners
For a complete list of eligible expenses, visit the CRA website.
A HCSA offers tax benefits to employers and flexibility and freedom to employees, allowing them to pay for medical expenses not covered under their provincial health insurance plan. If you have any questions about your plan, contact your employer.
Learn how to get the most out of your own health insurance and contact us today at firstname.lastname@example.org or 647.349.7070 to get the conversation started.
Where there’s a will, there’s usually at least one executor – a critical role whose mandate is, as the title suggests, to execute your instructions on the distribution of your property after you die. This blog post is by no means intended to be legal advice but merely a call to use common sense when deciding on the future of your assets.
To be an executor is a serious and time-consuming undertaking that comes with fiduciary responsibilities and legal liabilities. Yet many people don’t take the time to truly consider if the person –or persons – they’ve chosen has what it takes to take on the consequential demands of the role. Is the person willing and able to perform the duties you are asking for?
Making the wrong choice for an executor may be a mistake you won’t live to regret. But the beneficiaries of your estate – and perhaps even your appointed executors – will most certainly wish you had made a better selection.
It starts with understanding
Most people know the general definition of the executor role and those who don’t have Google to help fill in the blanks. Few people really know what it takes to be an executor. What a lot of people don’t realize is the number of tasks and moving parts associated with being an executor. For example, there will be paperwork – a lot of it – because your executor is responsible for submitting your will for probate, accounting for your assets and debts, and filing your outstanding taxes. Your executor will also need to consult and coordinate with your accountant, lawyer and other advisors. Your executor may even be called upon to resolve disputes between your heirs.
Educate yourself (and the family) then identify the best candidates
Your eldest child may have done a great job of organizing family dinners and smoothing over sibling rivalries. Then there’s your business partner – an upstanding colleague with smarts and integrity. But before you start naming them as executors, ask your lawyer for an executor job description that details every possible task under this role. Then identify the skills, knowledge and character traits needed to carry out each task. You’ll find that many of the tasks require a level of financial literacy while others require careful attention to detail. Qualities such as good reasoning, sound judgment and fairness are also critical in this role, as is the ability to communicate and mediate between parties. As you match desired qualifications to your executor’s job description, you’ll likely start to make a shortlist of suitable candidates and perhaps scratch off a few of the names you originally had in mind.
Make sure you’ve got the right mix
If you’re appointing more than one executor, make sure you’ve got the right mix of people. This means ensuring your executor team will have the ability to talk through disagreements and bring a fair and united approach to ensuring your wishes are carried out. It’s also a good idea to set down some rules of engagement and decision-making. For example, will decisions have to be made unanimously, or will majority rule? Will one executor have veto powers? As you consider these points, you should also think about potential candidates for back-up executors in case the ones on your top list decline or are simply not available to take on this responsibility.
It can take years – and potentially a lot of stress – to carry out the duties of an executor. While your appointees may consider it an honour to be entrusted with such an important responsibility, they’ll likely also appreciate some financial compensation for their time and effort. Talk to your lawyer about paying your executors, keeping in mind that compensation typically ranges within 2.5 per cent to five percent of your estate’s total value. This is especially critical if the size and makeup of your assets, or your family structure and dynamic, could make the distribution of your property complicated and challenging.
No matter what, have the talk
Yes, talking about your impending death can seem morbid and might cause pain for you and your family. But not discussing your estate plans today can bring even more pain for your heirs tomorrow. So have the talk with the people who stand to inherit your property, as well as with those you’d like to entrust with the responsibility of executing the terms of your will. This will give you a chance to explain why you’re making certain decisions for your estate, and to hear any concerns your family and appointed executors may have. You may be surprised by what you learn from these conversations and how these new insights can help ensure you’re taking care of the people you love, in exactly the way you want.
It’s taken you a long time to build your assets, and you may still have many years left to keep growing your wealth. Don’t let all your hard work go to waste when you’re gone. Don’t risk the harmony in your family. Take the time to ensure your estate plan is built on a solid framework that includes the right executor and all the required conversations. Not talking about the problem, will definitely not make the problem go away.
Let’s start the conversation. Contact us today at email@example.com or 647.349.7070 to get the conversation started.
Financial advisor Elke Rubach, right, enjoys beach time with Emily Strike. Rubach mentors Strike, whom she met through Fashion Heals for Sick Kids. Photo by Christopher Lawson
Elke Rubach was a successful lawyer when she discovered her passion for helping people understand finances
Elke Rubach was determined to do things the right way from the get-go when she set her sights on a career in the financial advisory business. Already an established lawyer, she spent a full year talking to experts to learn about the industry, including the products it has to offer and what they can do for clients, and about client-advisor relationships.
Rubach is the founder and president of Rubach Wealth, a “holistic” family advisory firm in Toronto. Over the past nine years, she built a practice that serves 280 professional clients of all ages and stages of their careers. As a result, their investable assets range from about $500,000 for young professionals to $3 million–$5 million for established families, and can be in excess of $35 million for business owners.
“I am responsible for my clients’ spouse and children too,” Rubach said. “At the very minimum, if Dad dies or Mom dies, I need to be able to look [the survivors] in the eye and say, ‘I’m really sorry this happened. But Dad or Mom did the right thing in looking out for you, and I’m here for you, too.’”
Rubach’s strong work ethic and empathy toward others originated early in her life. A native of Mexico City, Rubach was only 15 when her father, Karl, died. Her mother, Clara, was left with four children and a whole new set of responsibilities for raising the family.
“Mom had to go from not working while she had the four kids to having to figure out how to make a living,” Rubach said. “Watching how she made it work, I think, gave me grit.”
Rubach, who is fluent in English, French, Spanish and German, graduated law school at the Instituto Tecnológico Autónomo de México. She was called to the bar in 2000, and began her career at the law firm Ritch Mueller Heather y Nicolau SC in Mexico City.
In 2001, Rubach relocated to the U.K. to study at the London School of Economics and Political Science on a Chevening Scholarship, earning her master’s degree in law the following year. She subsequently was hired as an associate in the London office of McCarthy Tétrault LLP.
One of the key files Rubach worked on concerned Argentina’s severe debt crisis and involved her firm’s Latin America team in Toronto. In 2002, McCarthy Tétrault asked Rubach to transfer to its Toronto office for a year.
“Nineteen years and three kids later, I’m still here,” she said.
Rubach left McCarthy Tétrault in 2005 to work for Bank of Nova Scotia. While working for Scotiabank’s compliance department, she discovered her passion for helping people control their finances.
This discovery sowed the seeds for a career change. “I loved spending time explaining to people what they were getting into and how everything is connected,” Rubach said. “I saw that people often go through life busy — building careers, looking after people — but in their financial affairs there’s absolutely zero clarity. That’s where I said, ‘There’s a niche for that,’ and decided to open up my own business.”
Rubach burnished her credentials by earning her certified financial planner and chartered life underwriter designations during the early years of her practice. She added the family enterprise advisor designation in 2020.
Rubach believes the trusting relationships she has established with her clients is her biggest success. “It’s a collaboration,” she said. “There is professional respect both ways. In my conversations with clients, I say, ‘Let’s take a long-term outlook — invest time and put a proper plan in place. And let’s invest in the relationship.’”
Rubach encourages clients to ask as many questions as they need to feel comfortable. And she isn’t afraid to ask her clients tough questions.
For example, if a client has a family business and three children, Rubach will ask questions such as: “Have you talked to the children about your business? Do they want to take it over? If you give this business to your eldest son, what’s going to happen with the other two children? Does your son know how to run the business?”
Answering those and many more questions is necessary to develop a practical plan that will provide peace of mind for the clients. “It gets emotional, but I love the intermediation of those intergenerational transfers,” Rubach said.
Rubach Wealth has five employees, including an associate and three marketing and administration staff. “I’m the partner,” Rubach said, “but I’ve always told my colleagues that nobody works for me. We all work together.”
Rubach takes pride in her ethical standards. “We strive to deliver value in our advice that far exceeds the cost,” she said. “I firmly believe that a mis-sold insurance policy can destroy a family. I am very conscious of that.”
She also levels with clients and prospective clients regarding expected returns on investments. “We do not guarantee rates of return,” she said, “and I am honest about that.”
One thing Rubach has learned is to temper her enthusiasm when a new financial product or service catches her eye, and not to rush to offer new ideas to clients. “I’m someone who is super-passionate about things,” she said. “Although passion is contagious, if you go too fast in business with a product or a strategy — and don’t follow the client’s pace — you risk losing the client.”
Rubach has been a member of the Ontario Ministry of the Attorney General’s Investment Advisory Committee of the Public Guardian and Trustee since 2019. She is serving a three-year term as one of nine voting members, whose role is to advise the Public Guardian and Trustee on how to invest the money of people who are incapable of making such decisions.
“This role further reminds me of the too often overlooked importance of having a will and powers of attorney,” she said.
Rubach, a mother of two sons and a daughter between the ages of 10 and 14, loves travelling, cycling and golf, although she admits the last is a “work in progress.”
Rubach also is an active volunteer. She is a member of the advisory board for TransPod Inc., which is developing affordable and sustainable ultra high-speed transportation in Canada. She also has been a board member of Lycée Francais de Toronto, a private school, for the past seven years.
Rubach holds several voluntary positions with Hospital for Sick Children in Toronto, including co-founder and chair of Fashion Heals for Sick Kids, a fundraising fashion show in which the models are kids, researchers, doctors and others connected to the hospital. Models are professionally styled for the night, according to Rubach.
“For the kids, and for us, it’s the experience of a lifetime,” Rubach said. “Through fashion, they’re telling you their story — the resilience and courage that these kids have. We keep in touch with most of our models and have seen them grow from kids to inspiring young adults.”
She also speaks frequently at events, especially about topics affecting women’s financial health and well-being.
“I’m really passionate about empowering women,” Rubach said, “financially, socially, and professionally.”
Making financial advice a family matter
Even with careful planning and diligent saving, some parts of retirement planning are out of your control. Factors like longevity, rising medical costs and the ups and downs of the market can have an impact on your savings. But while you can’t plan for the unexpected per se, there are ways you can manage these risks and protect your retirement income. Here’s a look at four common retirement risks and how to address them.
- Longer life expectancy
People are living longer now than ever before. The average life expectancy in Canada is around 80 years for men and 84 years for women. That’s about 10 years longer than people were living in the 1960s.
There are many benefits to living longer, but it also means carefully considering strategies to avoid outliving your savings. One way to combat this is to delay the age you start collecting your Canada Pension Plan (CPP) benefits. You are eligible to start collecting your benefits at age 60, but the longer you wait, the greater your benefit will be. If you can hold out until age 70, you’ll receive the maximum monthly amount.
You may also want to consider other sources of regular income, such as annuities to supplement CPP benefits and withdrawals from retirement accounts. You typically purchase annuities with a lump sum, and the annuity then makes regular payments to you over a fixed period of time. That said, annuities come with unique trade-offs and risks. For example, it’s possible inflation could rise higher than an annuity’s guaranteed rate. What’s more, annuities are generally illiquid investments, meaning your money will be tied up for a set period and you won’t be able to access it without facing stiff penalties. Discuss annuity options with a financial advisor before adding one to your portfolio.
- Medical costs and long-term care
Another implication of living longer is increased health care costs, including long-term care services. Long-term care refers to assistance needed for daily activities, like eating, bathing or dressing. This type of care can be provided at home or an assisted living facility like a nursing home. About 7 percent of Canadians age 65 and older live in some sort of assisted living facility, and the average cost of a private room in these facilities is about $33,349.
Even if you don’t anticipate needing long-term care anytime soon, it may be worth considering long-term care insurance now in case you need these services in the future. Consider purchasing coverage well before you retire as it typically becomes more expensive as you age.
- Market risk
Market fluctuations are a natural part of the market cycle, yet a downward turn right before retirement can lower the value of your investments just when you need them most. As you near retirement, consider rebalancing your portfolio to include more lower-risk investments, like bonds, that are less likely to be affected when stock markets head south.
- Rising inflation
Inflation reduces your spending power and can have a big effect over a 30-year (or longer) retirement. There isn’t much you can do to stop inflation, but you can invest in assets that protect against some of its effects. Property prices tend to rise with inflation, making real estate investments a good inflation-protected option. You may also consider inflation-linked bonds (ILBs), which offer a fixed interest rate, but their principal is adjusted for inflation.
Understanding these risks to retirement can help you know how to address them and keep your savings on track. Contact us today at firstname.lastname@example.org or 647.349.7070 to get the conversation started.