• Home
  • |
  • Blog
  • |
  • Canada Emergency Response Benefit Clarified

April 24, 2020

Canada Emergency Response Benefit Clarified

Posted in   Business, COVID19   on  April 24, 2020 by  Admin , Comments:  0  

This article was originally posted on Mar 25, 2020 and has been updated to include Government announcements as of April 24, 2020.

To provide support to individuals facing financial hardship due to COVID-19, the Government has introduced Canada Emergency Response Benefit (CERB) to give eligible individuals $500 per week, for up to a maximum of 16 weeks, between March 15, 2020 and October 3, 2020.

This is how the benefit will work.

Eligibility

1. Who is eligible to apply for CERB?

The CERB is available to workers:

  • residing in Canada, who are at least 15 years old;
  • who have stopped working because of COVID-19 or are eligible for EI regular or sickness benefits or have exhausted their EI regular benefits or EI fishing benefits between December 29, 2019 and October 3, 2020;
  • who have not voluntarily quit their job;
  • who had employment and/or self-employment income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and
  • who have earned not more than $1,000 in employment and/or self-employment income over 14 or more consecutive days within the four-week benefit period of their first CERB application. For subsequent applications, they expect to earn not more than $1,000 in employment and/or self-employment income over the entire four-week benefit period of their new claim.

2. Under what circumstances can I apply for CERB?

CERB is available to individuals who stopped work as a result of reasons related to COVID-19. You cannot quit your job voluntarily and apply for CERB.

As such, the following can apply for CERB:

  •  workers, including those who are self-employed, who have been let go from their jobs or whose work hours have reduced;
  • workers who are sick, in quarantine, or taking care of someone who is sick or in quarantine due to COVID-19;
  • workers who must stay home without pay to care for children or other depedents because of school and care facility closures; and
  • workers who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work.

CERB is also available to workers who are eligible for EI regular or sickness benefits and those who have used up their entitlement to EI regular or fishing benefits between December 29, 2019 and October 3, 2020. The latter entitles workers in a seasonal occupation and those laid-off from work prior to March 15, 2020, for reasons not related to COVID-19, to claim CERB. The date of eligibility for CERB, in this case, would be the week following the last EI benefit payment or March 15, 2020, whichever is latest.

3. Do I need to be laid off from work to access CERB?

No, you can apply for CERB even if you remain attached to your employer as long as you meet the eligibility requirements. This covers temporary lay-offs by employers as well as sending employees on unpaid leave (taking a furlough) to cope with the decline in work due to COVID-19. In such a case, you may continue to receive other benefits such as medical benefits from the employer and still be eligible for CERB.

4. I have my job, but I don’t feel comfortable going to work as a result of risk associated with COVID-19. For example, what if I have someone at home who has a compromised immune system and I cannot risk infecting them. Am I eligible to apply for CERB in such a case?

You can apply for CERB only if you meet the eligibility requirements. One of the qualifying conditions is that you cannot voluntarily quit your job.

If you are concerned about the safety of your working conditions, you should discuss the situation with your employer and refer to legislative framework for information on your rights and the process you may follow. The Canadian Centre for Occupational Health and Safety (https://www.ccohs.ca/) is another possible resource.

5. I am a student who was working part-time and lost my job for reasons related to COVID-19? Am I eligible to apply for CERB?

Yes, provided you lost your job as a result of COVID-19 and meet the other eligibility criteria.

Student loans and bursaries do not affect eligibility for CERB, so you may continue to receive these payments while receiving CERB.

6. I have been in an apprenticeship program, receiving funding through the EI Program, and lost my job as a result of COVID-19. Am I eligible for CERB?

No, but you may be eligible to continue receiving your EI benefits.

7. What types of income make up the $5,000 threshold?

The income threshold of $5,000 in 2019 or in the 12 months prior to the date of application may come from employment and/or self-employment, which may include among others:

  • tips declared as income;
  • dividends from corporations subject to small business tax rate (i.e., non-eligible dividends);
  • honoraria, for example, nominal amounts paid to emergency service volunteers; and
  • royalties, for example royalties paid to artists as compensation for using or allowing the use of a copyright, patent, trademark, formula or secret process that is a result of their own work or invention. Other royalties (i.e., from investment activities) do not count toward the income limit.

The income does not have to be earned in Canada, but you need to reside in Canada.

If you are not eligible for EI, you may also include maternity and parental benefits under the EI program and/or similar benefits paid in Quebec under the Quebec Parental Insurance Plan.

Pensions, student loans and bursaries are not employment income and therefore, should not be included.

8. What is included in the $1,000 of income I can earn while receiving CERB?

The $1,000 comprises of employment and/or self-employment income, which may include among others:

  •  tips you may earn while working
  • dividends from corporations subject to small business tax rate (i.e., non-eligible dividends);
  • honoraria (e.g., nominal amounts paid to emergency service volunteers); and
  • royalties (e.g., paid to artists). Royalty payments received from work that took place before the period for which you applied for CERB do not count as income during that specific benefit period.

The following amounts received in a benefit period are not considered income for the purposes of CERB and do not affect eligibility for the benefit:

  •  pensions;
  • student loans and bursaries; and
  • disability benefits.

Applications will be verified against tax records to confirm income.

9. What are the considerations for self-employed, small business owners?

Small business owners can receive income from their business in different ways, including as salary, business income or dividends. In determining their eligibility for CERB:

  • Owners who take a salary from their business should consider their gross salary.
  • Owners who draw business income should consider their net, pre-tax income (gross income less expenses).
  • Owners who rely on dividend income should consider this as self-employment income provided it comes from non-eligible dividends (generally, those paid out of corporate income taxed at the small business rate).

While in receipt of CERB, small business owners may still have a small amount of income coming into their business account to pay for business expenses (commercial rent, utility costs, etc.). They may be eligible for CERB as long as the income they are paying themselves from the business, as noted above, is less than $1,000 and they have stopped working as a result of COVID-19.

10. I am not a Canadian citizen or permanent resident. Can I receive CERB?

To be eligible for CERB, you must reside in Canada and have a valid Social Insurance Number. Temporary foreign workers and international students may be eligible to receive CERB if they meet the eligibility requirements..

Application

11. When can I apply for CERB?

Applications are being accepted since April 6th. You cannot apply after December 2, 2020.

12. How do I apply?

The best way to apply is online. Applicants will be asked simple questions and will be directed to either Service Canada’s or CRA’s portal. For online applications, you will need to set up a My Service Canada Account or CRA’s My Account.

Alternatively, you can apply through the automated toll-free line at 1-833-966-2099.

13. Is it a one-time application?

No, you will need to apply and confirm your eligibility for CERB every 4 weeks (to a maximum of 16 weeks) if your situation continues. If you are receiving CERB through Service Canada, you must complete your EI Report Card to confirm your eligibility.

The 4-week benefit periods are:

  • March 15 – April 11, 2020
  • April 12 – May 9, 2020
  • May 10 – June 6, 2020
  • June 7 – July 4, 2020
  • July 5 – August 1, 2020
  • August 2 – August 29, 2020
  • August 30 – September 26, 2020

14. Can I apply for CERB once through Service Canada and once through CRA?

No, you should not apply through both. You can either apply for CERB through Service Canada or through CRA.

15. There are dedicated days to apply for CERB. What are those?

To avoid system overload, CRA has set up specific days for you to apply.

CRA-CERB-Days

16. Do I need to provide any documentation when applying for CERB?

You only need to provide your personal contact information, your Social Insurance Number and confirm that you meet the eligibility requirements. You may be asked to provide additional documentation to verify your eligibility at a future date.

17. Do I need a ROE to apply for CERB?

No. While ROE is not required for CERB application, employers are encouraged to submit ROE should employees subsequently need to apply for EI benefits.

18. Do I need a medical certificate to receive CERB if I am in quarantine or sick from COVID-19?

No. You only need to complete the online application and confirm that you meet the eligibility criteria. Information provided during the application process may be verified at a later time.

19. Do I need a proof of income for last year when applying for CERB? What if I have not declared that I earned any money in the last year?

At the time of applying for CERB, you only need to confirm that you meet the eligibility criteria. You may be asked to verify, at a later date, that you had at least $5,000 in employment and/or self-employment income in 2019 or in the 12 months prior to the date of your application. Income tax return filed for 2019 is one way to substantiate last year’s income but is not an eligibility requirement.

Receiving CERB Payments

20. By when can I receive payments under CERB?

If you have signed up for direct deposit, you can expect to receive payment into your bank account within three to five business days. Payment by cheque will be received within 10 business days.

21. How much will I receive?

You will be paid $500 per week, up to a maximum of 16 weeks.

22. What period is covered by CERB?

The benefit covers a maximum of 16 weeks and is available retroactively from March 15, 2020 until October 3, 2020.

23. Does the 16-week period start when I apply or when I receive my first payment?

The 16 weeks start with the first week for which you are receiving CERB, but they do not have to be counted consecutively. For example, you could receive CERB for the 4-week period beginning March 15, 2020 and reapply for your second benefit period a few months later, depending on your personal situation.

The 16-week period does not restart when you reapply for CERB after taking a break because you had employment/self-employment income in the intervening period.

24. Will I receive text or email notification of payment?

CRA will NOT send you an email with a link to your payment or communicate with you through text or instant messaging. Beware of scams involving such communication.

25. Is CERB taxable income?

Yes, the benefit will be reported as income in the tax return for 2020. An information slip will be made available for the 2020 tax year in CRA My Account.

26. What happens if I get a CERB payment twice because I applied once to CRA and once to Service Canada?

There will not be any penalty if you have received a payment in error. However, you will have to repay CERB to which you are not entitled.

27. What will happen if I am considered ineligible for CERB at a later date?

You will be required to pay it back.

28. What do I do if I received CERB payment but returned to work during the benefit period?

You will be required to repay CERB.

29. How do I return or repay CERB?

If you still have the original CERB cheque, you can return the cheque by mail to the address below.

If you received CERB payment by direct deposit, or deposited the cheque, you can mail your repayment to CRA. Be sure to:

  •  Make payment out to “Receiver General for Canada”
  • Indicate it is for “Repayment of CERB”
  • Include your Social Insurance Number (SIN) or your Temporary Tax Number (TTN)

Please do not send cash through the mail.

Please mail your payment to

Revenue Processing – Repayment of CERB

Sudbury Tax Centre

1050 Notre Dame Avenue

Sudbury ON  P3A 0C1

CERB or EI

30. I am receiving EI benefits. Can I also receive CERB payments?

No, you cannot be paid EI benefits and CERB for the same period. If you are already receiving EI regular and sickness benefits, you will continue to receive them until the end of your benefit period and should not apply for CERB in the meantime.

If your EI benefits end before October 3, 2020 and you are unable to return to work due to COVID-19, you can apply for CERB at that time if you meet the eligibility requirements.

31. I have stopped working because of COVID-19. Should I apply for EI benefits or claim CERB?

If you meet the eligibility requirements, you should apply for CERB, whether or not you are eligible for EI.

32. I have applied for EI benefits but have not yet received payment. Should I apply for CERB?

No, you should not submit another application for the same benefit period. If you became eligible for EI regular or sickness benefits on or after March 15, 2020, your claim will be automatically processed through CERB. If you became eligible for EI prior to March 15, your claim will be processed under the pre-existing EI rules.

33. I stopped working before March 15 but applied for EI after March 15. Which benefit will I receive?

It’s your eligibility date and not the claim date that matters. If you became eligible for EI regular or sickness benefits prior to March 15, your claim will be processed under the pre-existing EI rules.

34. I stopped working before March 15, 2020 due to COVID-19 but am not eligible for EI benefits. Will I receive CERB payments?

Yes, but the benefit will be available for a maximum of 16 weeks starting March 15 and not before that.

35. I lost my job due to COVID-19 and have been working while on claim. Which benefit will I receive?

If you lost your job for reasons related to COVID-19, you may be eligible for CERB provided you meet the eligibility criteria. You will no longer be eligible for EI benefits as part of working while on claim.

36. If I would be entitled to less than $500 per week under EI, will I get $500 under CERB?

Yes. When you apply for CERB, you will receive $500 per week, regardless of what you may have been eligible to receive through EI.

37. If I would be entitled to more than $500 per week under EI, will I get this higher amount under CERB?

No. When you apply for CERB, you will receive $500 per week, regardless of what you may have been eligible to receive through EI.

38. Can I apply for EI benefits after I have received payments under CERB?

Individuals who have received CERB but are still unemployed after October 3, 2020 can apply for EI, if they are eligible for EI regular and sickness benefits. The period over which you receive CERB does not impact your EI entitlement, but you cannot receive EI benefits and CERB for the same period.

39. If I am on special benefits such as maternity/parental, am I eligible to apply for CERB?

You cannot receive maternity or parental benefits at the same time as CERB. If work is not available as a result of reasons related to COVID-19 upon conclusion of your maternity/parental leave, you may apply for CERB if you meet the eligibility requirements.

40. I am part of work-sharing agreement with my employer and Service Canada. Am I eligible for CERB?

No, you are not eligible as you cannot receive EI benefits and CERB at the same time.

This information will be updated as more details are made available by the Government.

 

We are a CPA firm in downtown Toronto that provides tax, accounting, corporate and advisory services to businesses. We would be happy to answer any questions that you may have.

Related Posts

Have you applied for the $40K CEBA loan?

Temporary Wage Subsidy for Employers Clarified

The 75% Canada Emergency Wage Subsidy for Employers

Wage Subsidy, Tax Payment Relief + More Announcements for Businesses

Leave a Reply


Your email address will not be published. Required fields are marked

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

Call Now +1 (647) 532-4606