July 2013

Employee Benefits News: Ontario Simplifies Financial Hardship-Unlocking Process

Ontario is making it easier for people who need to access their locked-in retirement funds by restructuring its financial hardship-unlocking program.

Beginning Jan. 1, 2014, individuals can apply directly to their financial institution for financial hardship withdrawals, rather than to the Superintendent of Financial Services.

The government is also reducing the amount of evidence required to authorize a withdrawal. And the asset test that determines how much can be unlocked from an account will be replaced with a maximum withdrawal limit.

The seven criteria under which an applicant can apply for financial hardship unlocking will be consolidated into four: rental or mortgage arrears, medical expenses, payment of first and last month’s rent, and low income. An individual will not be able to make more than one application under each of the four financial hardship criteria per year.

“These measures will make it easier for those struggling with loss of income or medical expenses to get access to their locked-in accounts,” says Charles Sousa, the province’s minister of finance.

Locked-in funds are amounts transferred from an Ontario registered pension plan into an Ontario locked-in account (locked-in retirement accounts, life income funds and locked-in retirement income funds) where they are held to provide income in retirement.

The restructuring of the financial hardship-unlocking program was a commitment in the 2012 budget.

Read more: Ontario budget introduces major pension changes

Work/Life Balance: Prepping your child for leaving home

In essence, parents have been doing this all along in their own particular fashion: getting their children prepared for an independent life. Yet there still seems to be a myriad of skills that must be learned before they will finally be ready to move into that adult world, be successful, and lead enriching lives. While the level of skills learned by young adults will vary, the following are typical life skills that parents should address with their children.

Assess your teen’s readiness to leave home

According to a recent study, the trend for remaining at home with parents was up by 51% in 2010 from 1998. Why? One reason is that more young adults are continuing their studies, and therefore the expense of post-secondary education plays a role. This study also suggests that young adults wait longer to marry and have children, which may delay independence. It is essential for parents and children together to determine when the time is right for leaving home. While there may be plenty of good reasons for older children to live at home, most parents do not want a lack of adult life skills to be the determining factor.

Teach positive lifestyle choices

Being responsible for one’s own life is the core issue when it comes to leading an independent life. Parents may worry that once a child is on their own they are going to forget to do laundry, live on frozen pizza, and party all the time. If young adults can get into the habit of doing chores (such as laundry) for themselves, cooking healthy meals, and making positive decisions about how they spend their time, they will have the edge they need to make the transition to independent adulthood.

Address money matters with your kids

Younger workers typically earn entry level wages that increase over time. Yet low starting wages leading to debt does not have to be part of the picture for all young adults. Parents need to discuss if mortgage debt is something their children are ready to commit to, and they must certainly address credit cards and unnecessary debt that can impact a teen’s financial future. Basic accounting skills, budgeting, and making sound financial decisions are all part of the money skills that older children will need in order to thrive on their own.

Encourage healthy relationships

Relationship issues can emerge from a variety of dynamics: a roommate who is notoriously late with rent, a love interest that isn’t willing to commit, or a boss who is a bully. Parents hope that their children grow up to know the sweetness that comes from positive relationships, but also know how to navigate relationships that turn sour. Strength of character, forthrightness, dignity and trustworthiness are all traits that will get your children through the rough patches. Taking time to teach your children about making healthy choices is critical to their future success in life. Knowing that their parents provided them with the right skills to cope with independent life will give teens the start they need. Children should also understand that even though they brew their own coffee and sleep in their own bed, they can always pick up the phone to call Mom and Dad for advice, or speak to
a counsellor through their Employee and Family Assistance Program.

How to prepare your kids for transitioning into life on their own

It’s a bit of a cliché – the grown children who prefer to continue living with Mom and Dad, swimming in the pool, enjoying Mom’s good cooking, and putting off life’s grown-up responsibilities for one more year. No matter how hard it is to transition into an independent life, children and parents can use the following tips to prepare for life away from the nest.

Raise the bar on household chores

Encourage your child to be responsible for household chores. While simply cleaning their bedroom may have been on their to-do list for years, it is not enough to prepare them for what is coming when they are on their own. Doing their laundry, preparing healthy meals, completing tasks on time – doing all these things at home will prepare them for moving out.

Help your kids to stay organized

Using a calendar, making lists, and keeping routines can help teens stay organized. These simple tricks can help teens pay their bills on time, meet their commitments, and live balanced lives.

Teach your kids healthy spending habits

Teens that get into the habit of creating budgets and sticking to them will learn life lessons that older adults still struggle with. Even small-scale budgets for monthly expenses like school lunches, clothing, and entertainment will help them get used to living within their means. You can also help your teen with a credit card tied to their account. Parents should set limits and review monthly statements with their teens, so they become more competent with credit card use.

Encourage kids to live healthy lives

Encouraging teens to integrate healthy habits, such as a good fitness routine, proper nutrition, and optimal rest, can help them lead healthier and more energetic lives. Even small habits like snacking on fruit instead of chips, or going for a bike ride instead of playing video games can lead to big health benefits later on. Similarly, refraining from smoking or excessive drinking will also benefit their lifestyle.

Show your kids the benefit of setting goals

Whether financial or career-oriented, goals help people stay on track. Forward thinking and long-term planning are essential qualities your teen will need in order to thrive in life and at work.

Avoid troublesome relationships

Sometimes kids that are in trouble all the time turn into adults that are in trouble all the time. Your child needs to assess the people they allow into their lives carefully, or they too could get swept up into a bad crowd. Teach your child how to avoid these relationships and confront their problems. For example, if a troublesome roommate forgets to pay his or her share of the rent, or if he or she shirks housekeeping responsibilities, it is better to address such issues immediately or they are likely to reoccur. Handling problems right away means they can be solved right away.

Consider romantic relationships

Most parents try to counsel their children to keep marriage on the back burner until studies are completed and steady work is found. Although a challenge, couples who wait to marry and begin families until they are financially ready have a much easier time. According to an article in Psychology Today, “Extending the courtship period in all cases will progressively minimize your relative risk of developing lasting regrets down the line.”

Promote resiliency for coping with stress

Everyone experiences trials, obstacles, and unfortunate situations that can lead to emotional distress. Learning to cope with stressful situations and working through negative emotions is necessary for the long haul. The earlier your child can learn how to positively deal with stress, the better their chances of leading a successful life.

Transitioning into the adult world can be an extremely emotional time, often more so for parents! If you prepare your child for the real world with the tips above, you will at least have the comfort of knowing you have done your best to support him or her to succeed and live an enriching and rewarding life.

excerpts provided by: Benefits Canada, June 25, 2013 and Shepell fgi July 2013


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