Settlement Funds in Canada | Proof of Funds
- 1 What are settlement funds?
- 2 What is accepted as proof of settlement funds?
What are settlement funds?
Settlement Funds are the minimum sum of money that an immigrant should have to support themselves financially when they arrive in Canada. It is an acknowledged fact that adjusting to life in Canada is extremely complicated. But with the settlement funds in hand, an immigrant or a refugee will not be a burden on the Canadian economy. In other words, the settlement funds are also known as proof of funds.
Many Canadian immigration programs ask the applicants to provide their proof of funds in order to settle in the country. However, the settlement funds required to produce to the immigration authorities depend on the program pathway the immigrant is applying for and their family size, including the primary immigrant, their spouse or common-law partner, their dependent children, or the dependent children of their spouse. The spouse or dependent children of the principal applicant should be included during the application process, even if they possess Canadian citizenship or permanent residency or are not accompanying the applicant to Canada. The more family members, the more money an immigrant or applicant needs to show as settlement funds.
All economic immigration applicants must mandatorily provide proof of financial support. This ensures that the immigrants and their accompanying family members living as permanent residents in Canada can support themselves financially. It should be noted that these settlement funds cannot be borrowed from another person.
Settlement funds – How much is required?
The federal government of Canada had recently increased the amount of settlement funds that prospective immigrants need to show as proof in order to immigrate to Canada. The minimum amount of proof of settlement funds is updated annually based on 50 percent of Canada’s Low Income Cut-Off (LICO) requirements. As a result, there was a rise in the settlement fund requirements, and the minimum amount of funds required for a single applicant surged from $12,960 in 2020 to $13,213 this year, i.e., by 1.95 percent or $253.
Similarly, there has been a rise in the amount of settlement funds required when there’s an increase in the number of family members, i.e., for two persons, the settlement fund required is $16,449; for three persons, it is $20,222. $24,553 is required as a settlement fund for a family of four. While the settlement fund required for a family of five members is $27,847, it is $31,407 for six members and $34,967 for a family of seven. The settlement fund required for each additional family member is $3,560. It is worth noting that the amount of money that needs to be produced as a settlement fund increases on the basis of the number of family members.
What is accepted as proof of settlement funds?
Immigration, Refugees, and Citizenship Canada (IRCC) requires official letters from financial institutions or banks with the following requirements as proof of funds. The principal applicant can get these letters from banks where they safeguard their money, and the letters must include the following information,
- Should be printed on the letterhead of the financial institution
- Should contain the contact information (address, telephone number, and email address) of the financial institution
- Should include the name of the immigrant
- Should list any outstanding debts and loans (credit card debts and loans)
- Should include that the primary applicant is fully free of any liens, debts, and encumbrances
- For each current bank and investment account, the following should be included:
- Account numbers
- Date when each account was opened
- The current balance of each account
- The minimum balance for the past six months
The principal applicant should also provide evidence of the availability of the settlement funds in the form of bank account details that describes the required amount of ageing over some time within six months progressively. It is worth noting that any documents deviating from the requirements mentioned above may jeopardize the processing of visa at the discretion of the immigration authority assessing the data.
What type of proof of funds is not accepted?
The immigration authorities will not accept as settlement funds:
- If funds are not readily available
- Leased assets or equity of fixed assets shown as proof of funds will not be acceptable.
- Borrowed money from another individual.
- If the settlement funds are in the name of a spouse/ common-law partner, they cannot be displayed as proof unless the principal applicant has access to those funds. Moreover, these settlement funds should be available to the principal applicant from the beginning of the application procedure till the permanent residence process has been completed, and Permanent Residency citizenship has been granted.
Who should show proof of settlement funds?
- An international student going to Canada on a study permit is required to provide proof of settlement funds.
- Economic immigration applicants should show proof of settlement funds.
Who does not need to show proof of funds?
- An individual who has a stable job offer and a work permit in Canada
- An applicant who is applying for permanent residency in Canada via the Canadian Experience Class (CEC)
What type of settlement funds can be produced as proof?
- According to Immigration, Refugees, and Citizenship Canada (IRCC), an immigrant can exhibit properties or real estate assets as proof.
- The immigrant can produce proof of settlement funds in the form of documents that indicate property or capital payable to them, such as cash or
- Treasury bills.
- The principal applicant can also produce documents that promise payment of a certain amount of money, which are payable to them in the form of
- money orders
- banker’s drafts
- Traveler’s cheques.
- The authorities also permit the applicants to produce the proof of funds which are in the form of
- Registered Retirement Savings Plans (RRSPs)
- Guaranteed Investment Certificate (GICs) or Certificates of Deposit
- Term deposits and time deposits
- Cash-value life insurance
- Mutual Funds
- Provident Funds
- Tax-Free Savings Accounts (TFSAs)