COVID-19 Update: Canada Emergency Response Benefit

The government has established the Canada Emergency Response Benefit (“CERB”). This taxable benefit will provide temporary income support to employed and self-employed Canadians who are directly affected by COVID-19. It provides a payment of $2,000 for a 4-week period (the same as $500 a week) for up to 16 weeks.

Who Can Apply?

Individuals who have stopped working and are without employment or self-employment income for reasons related to COVID-19 are eligible to apply.  Examples of stopping to work could include but are not limited to:

  • You have been let go from your job or your hours have been reduced to zero;
  • You are in quarantine or sick due to COVID-19;
  • You are away from work to take care of others because they are in quarantine, sick due to COVID-19; and/or
  • You are away from work to take care of children or other dependents whose care facility is closed due to COVID-19.

Note that you will not need a medical certificate to receive the CERB if you are quarantined or sick due to COVID-19.

To be eligible, you must meet the following requirements:

  • You did not apply for, nor receive, CERB or EI benefits from Service Canada for the same eligibility period
  • You have not quit your job voluntarily
  • You reside in Canada
  • You are 15 years old or more when you apply
  • You earned a minimum of $5,000 income in the last 12 months or in 2019 from one or more of the following sources:
    • employment income
    • self-employment income
    • provincial or federal benefits related to maternity or paternity leave
  • For your first CERB application:
    • You have stopped or will stop working due to reasons related to COVID-19
    • For at least 14 days in a row, during the period you are applying for, you will not receive:
      • employment income
      • self-employment income
      • provincial or federal benefits related to maternity or paternity leave
  • For your subsequent CERB applications:
    • You continue to not work due to reasons related to COVID-19
    • For the 4-week period you are applying for, you will not receive:
      • employment income;
      • self-employment income; or
      • provincial or federal benefits related to maternity or paternity leave

The income of at least $5,000 may be from any or a combination of the following sources: employment; self-employment; maternity and parental benefits under the Employment Insurance program.  Individuals who were in receipt of non-eligible dividends (generally, dividends paid out of corporate income taxed at the small business rate) during 2019 or in the 12 month period prior to their date of application can count this income towards the $5,000 income threshold needed to be eligible for CERB.

The CERB is only available to individuals who stopped work as a result of reasons related to COVID-19. You do not need to be laid off to access the CERB.  Someone who quits their job voluntarily will not be eligible to claim the CERB.  In addition, if you are looking for a job but haven’t stopped working because of COVID-19, you are not eligible for the Benefit.

For example, if you are a student who had a job last year and were planning on working this summer you do not qualify for the benefit.

On April 15, 2020, the government expanded the eligibility rules to:

  • Allow certain workers the ability to earn up to $1,000 per month while collecting the CERB;
  • Extend the CERB to seasonal workers who have exhausted their EI regular benefits and are unable to undertake their regular seasonal work as a result of the COVID-19 outbreak; and
  • Extend the CERB to workers who have recently exhausted their EI regular benefits and are unable to find a job or return to work because of COVID-19

The CRA has indicated that they will be updating their website and application process to reflect the above expansion to the eligibility criteria.

How Long Can One Be Covered by CERB

The benefit will be paid in blocks of four weeks in the amount of $2,000, which is equivalent to $500 per week. A maximum 16 weeks of benefits can be paid.

The CERB is taxable although tax will not be deducted at source. You will be expected to report the Benefit as income when you file your income tax for the 2020 tax year.

Eligibility periods

Eligibility periods are fixed in 4-week periods.

If your situation continues, you can re-apply for CERB for multiple 4-week periods, to a maximum of 16 weeks (4 periods).

 4-week period cycle Period dates
1 March 15, 2020 to April 11, 2020
2 April 12, 2020 to May 9, 2020
3 May 10, 2020 to June 6, 2020
4 June 7, 2020 to July 4, 2020
5 July 5, 2020 to August 1, 2020
6 August 2, 2020 to August 29, 2020
7 August 30, 2020 to September 26, 2020

How to Apply

Applications for the CERB are to be done through the Canada Revenue Agency (“CRA”) through the following link:

https://www.canada.ca/en/revenue-agency/services/benefits/apply-for-cerb-with-cra.html

This method is for applicants who have already registered a CRA My Account.  For those who have not yet done so, My Account can be set up at the following link:

https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html

Alternatively, the application can be made through the automated toll-free lines at 1-800-959-2019 or 1-800-959-2041.  You will need your social insurance number and postal code in order to verify your identity.

Due to the expected number of applications, the CRA has set up specific days for you to apply based in the month one was born, as follows:

  • Those born in January, February and March are to apply on Mondays
  • Those born in April, May and June are to apply on Tuesdays
  • Those born in July, August and September are to apply on Wednesdays
  • Those born in October, November and December are to apply on Thursdays
  • Those born in any month can apply on Fridays, Saturdays and Sundays

Note that the CERB is available to workers (as defined above) whether or not they are eligible for Employment Insurance.  If you are already receiving Employment Insurance regular benefits, you will continue to receive these benefits until the end of your benefit period. If these benefits end before October 3, 2020, you may then apply for the CERB if you meet the eligibility requirements, including that you have stopped work because of reasons related to COVID-19.

If you were eligible to Employment Insurance benefits that started before March 15, 2020, and these benefits end before October 3, 2020, you may then apply for the CERB if you meet the eligibility requirements, including that you have stopped work because of reasons related to COVID-19.

If you became eligible for Employment Insurance regular or sickness benefits after March 15th and your claim has not yet been processed, your claim will be processed under the CERB program.  You will receive $500 per week, regardless of what you may have been eligible to receive through Employment Insurance. However, you retain your eligibility to receive for Employment Insurance after you stop receiving the Canada Emergency Response Benefit, and the period that you received the CERB does not impact your EI entitlement.

You cannot be paid Employment Insurance benefits and the CERB for the same period.

The government has stated that recipients will receive their CERB faster if the recipient has set up direct deposit with CRA.  If the recipient is already receiving benefits or tax refunds from the government by direct deposit, then the CERB will be paid to that bank account.  For those individuals that have not yet set up direct deposit, instructions can be found at the following website:

https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/direct-deposit.htm

Reapplying for Subsequent Eligibility Periods

If an individual’s employment situation has not changed at the conclusion of an eligibility period, they must reapply to continue to receive the CERB.  An individual can apply for up to 4 eligibility periods.

Return or Repay CERB

A recipient of the CERB may want to return or repay the CERB if they had either returned to work earlier than expected or had applied for the CERB but later realized that they were not eligible.

If a recipient still has the original CERB cheque it can be mailed back to the CRA.  If the original cheque had been cashed or if the recipient was paid by direct deposit, the recipient can issue a personal cheque and mail it to the CRA. The cheque is to be made payable to “Receiver General for Canada”.  The cheque should indicate that it is for “Repayment of CERB” and contain the recipient’s Social Insurance Number (SIN) or your Temporary Tax Number (TTN).

The above are to be mailed to:

Revenue Processing – Repayment of CERB
Sudbury Tax Centre
1050 Notre Dame Avenue
Sudbury ON P3A 0C1

Disclaimer:  The COVID-19 Canadian tax policies in the above article are changing rapidly as the governments introduce new measures. Certain details have yet to be published. We will aim to update them as soon as they are available.