Has Your Marital Status Changed?
When your marital status changes, it is important to let various government agencies know. There are many benefits and programs that are based on family income, so these programs need to know about your change in marital status.
When you become married or common-law, the dates need to be shared with Federal and provincial organizations so your benefits are correctly calculated.
As we have been processing tax returns during the past few months, we see many clients that have amounts owing to Canada Revenue Agency for their various benefits programs because the clients did not notify CRA of their change to their marital status, most often from single or separated to common law.
Also, when you separate (live separate and apart) after being married or common law, you may be eligible for an increase in the benefits.
Canada Revenue Agency
The most impactful changes are the benefits that are administered by Canada Revenue Agency CRA, including Canada Child Benefit, GST Credit, and the Canada Carbon Rebate.
Canada Child Benefits
This program provides additional tax-free income to parent(s) with children under 18.
When a single parent gets married or begins to live with a common law partner, it is important to advise Canada Revenue Agency. The date of common law may be immediately when you move together if you are both the parents to the child, or if you as the single parent are financially dependent on your new common law partner. If both of you are financially independent, the common law status may be only after 12 months if both of you are not the parents of the child(ren).
And both common law partners need to contact CRA separately either online or by phone and use the same date. Otherwise CRA has incomplete information and cannot calculate your benefits. If CRA does not have all the information it needs, your benefits could stop until they get the information they need from both partners.
When you separate, or no longer live together, you are only able to notify CRA of your new status after 90 days and then CRA will back date the separation date.
GST Credit
The Goods and Services Tax Credit is another program administered by CRA. Like the Canada Child Benefit program, the GST credit is calculated based on family income. When you become married, it is important to contact CRA so the GST credit is correctly calculated for both of you. When you move together and you do not have children, normally the common law date is 12 months after you move together. Both partners need to contact CRA separately to advise of the common law date which is normally at the 12-month anniversary of when you moved together.
If you separate, you can contact CRA after 90 days to have the GST credit recalculated.
Canada Carbon Rebate
The newest program administered by CRA is the Canada Carbon Rebate (CCR), previously known as the Climate Action Incentive. This rebate is also based on family status. All families are eligible to receive the CCR regardless of level of income. Unlike the CCB or GST credit, this credit is not based on family income, but it is only paid to one family member. So, if you marry or become common law (12-month anniversary), it is important both of you contact CRA so the CCR can be recalculated based on your new marital status.
If you do not notify CRA at the right time, CRA may backdate the calculations and one of you will need to repay one or more payments and the other partner will receive more.
Service Canada
The Guaranteed Income Supplement GIS is administered by Service Canada as part of the Old Age Security OAS program. The GIS is also based on family income and needs to be recalculated when you marry or become common law. Unlike the above programs, common law is immediate and not 12 months later. So, if you are receiving GIS and decide to marry or live common law, you need to contact Service Canada immediately.
Manitoba Pharmacare
In Manitoba, your prescriptions can be covered by Manitoba Health once you reach your deductible limit. This deductible is based on family income. When you marry or become common law you do need to contact Manitoba Health and update your new martial status whether you are now married or common law (immediately not 12 months later) or when you separate.
Employer Programs
Ensure your employer is also notified of your marital status change so programs they may offer can be updated. Date of common law may vary depending on their definitions, so you will need to check with them.
Insurance Policies and Registered Plans
When your marital status changes, review all of your life insurance policies and your registered plans like RRSPs, RRIFs, TFSAs. Does the beneficiary need to change?
Wills & POA & HCD
Your legal documents may need to be updated too. Or maybe you need to have them created if you do not have them already. Review all the documents you may have. If you marry, you need to get a new Will; the old will may be null and void when you re-marry. If you separate, you may want to update your legal documents.
The above list is only the major items that come to mind, you may have other products or plans that also need to be reviewed when your marital status changes.
Anni Markmann is a Personal Income Tax Professional and Certified Financial
Planner; living, working, and volunteering in our community. Contact Ste
Anne Tax Service at 204.422.6631 (phone or text!) or 36 Dawson Road in
Ste Anne (near Co-op) or info@sataxes.ca