Seniors to receive up to $500 in federal government aid to help cope with COVID-19

(Getty Images)

The federal government is promising more money to help seniors who are struggling to make ends meet during the coronavirus pandemic.

Anyone that qualifies for Old Age Security (OAS) will get a $300 one-time payment. Those that also qualify for the Guaranteed Income Supplement (GIS) get an additional $200.

Ottawa says 6.7 million seniors will get $300 and 2.2 million will get $500, at a cost of $2.5 billion.

“There’s no question that COVID-19 has been taking its toll on seniors, both emotionally and financially,” said Prime Minister Justin Trudeau, during his daily COVID-19 update.

“And with today’s announcement, our government is taking action to alleviate some of the stress they may be feeling, but there’s a lot more work to be done. Not only to find short term fixes, but long-term solutions.”

A date wasn’t announced, but Treasury Board President Jean-Yves Duclos said since legislation is not required he he hopes payments will be distributed quickly.

The Canadian Association for Retired Persons (CARP) says the supports are welcome, but aren’t a solution beyond the short term.

“Seniors have been impacted by an increase in the cost of living,” Marissa Lennox, CARP’s Chief Policy Officer, in a statement.

“Many low-income seniors depend on a variety of community support services, including food banks and volunteer tax preparation programs, many of which have closed their doors due to the virus. It’s unclear how long this will last.”

CARP is calling on the federal government to eliminate withholding tax on RRSP withdrawals for the 2020 tax year and allow two years to repay tax owing, as well as follow through with pre-election commitment to increase OAS and CPP.

Tax changes were also announced. The federal government will temporarily suspend GIS and allowance payments if seniors can’t pay taxes on time. The deadline to file to receive the GIS was pushed to October 1st.

Previously announced measures for seniors include a GST top up, and the ability to receive the Canada Emergency Response Benefit (CERB) while still receiving benefits.

The minimum RRSP mandatory withdrawal was reduced to 25 per cent and further changes could be coming.

“We’ll be watching the market we’ll be watching our economy and seeing how the recovery unfolds and I can assure you will be looking at all of these options as we move forward” said Deb Schulte, Minister of Seniors, during a news conference.

CARP wants Ottawa to to waive mandatory RRIF withdrawals in 2020.

An additional $20 million will be spent on the New Horizons for Seniors program for community programs to help avoid isolation.

“A lot of people, especially single seniors are feeling really lonely right now,” said Trudeau.

“So call your grandparents ask them how their day is going, how they’re doing and how you can help.”

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

Download the Yahoo Finance app, available for Apple and Android.