The healthcare debate going on south of us has me thinking. I’m grateful that I’ll never be denied basic healthcare for a pre-existing condition. I’m thankful that no matter how sick anyone in my family gets, the choice to see a doctor or go to the emergency room, will never be a financial decision.
In Canada we have a fairly wide financial safety net. Even if we have never saved a penny for retirement, once we hit 60 we can collect CPP or wait until 65, get more and add Old Age Security (OAS). If that isn’t enough, there is always the Guaranteed Income Supplement (GIS) for low income seniors. It won’t make you rich by any means but it’s enough for food, clothing and shelter, unless you live in Toronto or Vancouver in which case you might have to move in with a roommate or two.
If you are permanently disabled, there is the disability pension, as long as the person applying paid into the Canada Pension Plan in four out of the last six years. Again, it’s not a lot but it’s enough that a disease or accident shouldn’t leave you bankrupt. If the accident happened at work, there is worker’s compensation. If you get laid off, provided you are eligible, you can collect employment insurance.
For people with kids, Canada has one of the most generous maternity benefits in the world, not to mention the child tax benefit or the universal child care benefit.
In catastrophic conditions, social assistance is available. Each province or territory is responsible for their own social assistance programs. Look under the blue pages in your phone book under social services for the contact information in your province or territory.
Beyond all the government help that is available to people in need, there are thousands of non-profit organizations there to help in a crisis. Some of these include food banks, shelters, churches, mosques, synagogues and charitable groups that focus specifically on the poor in Canada.
Government benefits are just the basics of a financial safety net for worst case scenarios. One of our financial goals in life is to never rely on government assistance. We never refuse our Child Tax Benefit. Instead we use those funds to invest in the kid’s RESPs. We won’t turn away our Old Age Pensions, and after paying into the Canada Pension Plan for so many years, we consider it earned money anyway. Our hope is to never need the guaranteed income supplement or social assistance yet knowing that it’s there just in case, is a great comfort.
To help build an even bigger financial safety net, you might want to consider:
- 3 – 9 months expenses in an emergency fund
- life and disability insurance
- adequate house and car insurance
- an ever increasing retirement fund invested through RRSPs or TFSAs
- a great social support system which includes people who are there for you in a crisis
I know beyond a shadow of a doubt that if my house ever burnt to the ground, my spouse died and I lost my job I have friends and family that would gather around me and support me throughout just as I would for any one of them. In many ways it’s the social support system that has the potential to be a person’s largest safety net.
As Canadians, we have a fairly wide financial safety net. Beyond these basics, it’s important we plan for a secure future so when we’re faced with a crisis, we don’t sink financially. I take great security in a wide safety net and hope with every increasing financial security I can be there for others when they hit some of life’s bumps along the road.
How big is your financial safety net?
Kathryn has been a staff writer for MDJ since January 2009. During the day she works in an office. In her off hours, she volunteers as a financial coach helping ordinary Canadians with the basics of money management. Kathryn, along with her husband and two children live in Ontario.