Since the onset of the COVID-19 pandemic in March, the federal government has had to act to financially support Canadians. More than five million people lost their jobs or saw their work hours significantly reduced during March and April due to the economy slowing down.The Canada Emergency Response Benefit (CERB) was introduced to immediately help people whose jobs were affected by the pandemic to keep them afloat. More than 8 million people have applied to CERB.
CERB is a taxable payment of $2,000 per four-week period for eligible applicants. People eligible for CERB must:
- Be at least 15 years old and residing in Canada;
- Have earned at least $5,000 in 2019 or in the 12 months prior to their application;
- Have not quit their job voluntarily and are working less because of COVID-19-related reasons;
- Be eligible for Employment Insurance (EI) or other benefits or have exhausted their benefits between Dec. 29, 2019 and Oct. 3, 2020.
Individuals can earn up to $1,000 during a four-week period and remain eligible for CERB. The federal government said that people receiving CERB should actively seek work opportunities.
When CERB was announced, it covered a 16-week period beginning March 15. That period was set to end on July 6 but Prime Minister Justin Turdeau extended the program by eight weeks to continue supporting Canadians transition back into work. Individuals can also apply for retroactive benefits until December 2, 2020, so long as they were eligible to receive CERB during the 24-week period.
One of the drawbacks of CERB is that it works too well. Employers have reported having difficulty recalling employees to work because their employees are happily receiving CERB and are simply declining the offer. However, in order to qualify for CERB, an employee must have involuntarily stopped working. So if an employee chooses not to accept work, they’re no longer entitled to CERB.
There are also people who’ve received CERB who are ineligible. Some people received CERB through Service Canada and the Canadian Revenue Agency (CRA), for example. If the federal government determines that someone received a payment they didn’t qualify for, they’ll have to repay it. The CRA is asking people who need to make repayments to do so before Dec. 31, 2020, adding, no interest would be charged. CERB earnings must be accounted for when calculating income for 2020 so all recipients will receive a T4A tax slip for the amount of CERB they received.
Canadians still unemployed after the 24-week period covered by CERB can access EI and sickness benefits. If you’re receiving EI benefits and those benefits end before October 3, 2020, you can apply for CERB so long as you meet the qualifying conditions. Similarly, employees eligible for regular EI benefits can access those benefits even after receiving CERB.
The government stated that someone cannot receive CERB if their employer retroactively applies for the Canada Emergency Wage Subsidy. They’re encouraging Canadians who think they might be returning to work soon to consider waiting before applying to the next CERB period in order to make a “more informed decision.”
Marcus Medford | Contributing Writer