We are contacting you today to provide an update and general overview of the Canada Emergency Response Benefit (CERB). The CERB was introduced in March to assist those individuals who had ceased working in relation to COVID-19, by providing eligible individuals with a $2,000 payment for each of the prescribed four-week periods.  As a quick recap of the program:

  • Eligible individuals include Canadian residents who are 15 years of age or older, who have had their ability to work disrupted for reasons relating to COVID-19, and as a result are earning less than $1,000 of employment income, self-employment income, or non-eligible dividends during the prescribed periods.
  • The applicant needs to have earned at least $5,000 of employment income, self-employment income or non-eligible dividend income (or a combination thereof) during 2019, or in the 12-months immediately preceding their application period.
  • For first-time applicants, the $1,000 income limit applied to any 14 consecutive day period during the prescribed four-week interval.  For subsequent applications, the $1,000 income limit is only met if it is in relation to the entire four-week period.
  • Prescribed periods are divided into four-week intervals beginning on March 15, 2020 and ending on October 3, 2020 (a total of 28 weeks).
  • Prior to the extension described below, an individual could apply for CERB benefits for 4 of the prescribed four-week intervals.

Extension of the CERB program

Recently the government announced that it would be extending the CERB program by another 8 weeks, resulting in two additional eligibility periods beginning on July 5, 2020 and ending on October 3, 2020.   While a draft bill was proposed to require individuals to actively seek work, it was not passed.  Nevertheless, for applications for the July 5th and subsequent period, applicants may be required to sign an attestation acknowledging that “the government is encouraging them to look for work and to consult with the government’s job bank.”.

Canada Emergency Student Benefit (CESB)

Last month, the government also introduced the CESB for students who would not otherwise qualify for the CERB program or for Employment Insurance (EI). The program applies to individuals who are unable to find work, return to work, or are earning less than $1,000 during the eligibility period, that meet any of the following conditions:

  • Be enrolled at a recognized post-secondary educational institution (at least 12 weeks duration);
  • Have completed post-secondary studies in December 2019 or later; or
  • Have completed or expect to complete high school in 2020, and have applied for a post-secondary educational program that starts before February 1, 2021.

This program provides a benefit of $1,250 per each four week period starting from May 10, 2020 and ending on August 29, 2020 (total four periods).  For students with a dependent or a disability, the amount is bumped up to $2,000.  

Note however, that for students completing high school, the eligibility periods are limited to periods that begin AFTER their graduation. As a result, most high school students moving on to post-secondary education would only be eligible for two, four-week periods beginning on July 5, 2020.

The application process is similar to the CERB process.  Details on applying can be found here.

Overpayment of benefits

If you have received an overpayment of benefits, you are expected to return the funds received, either by mailing a cheque or by making a remittance through your bank or through the Canada Revenue Agency’s (CRA’s) “My Account” service.  For obvious reasons cash should not be sent via mail, and the government has issued notices to watch out for scams in relation to the CERB or CESB programs.

Overpayments may occur as a result of changes in your eligibility status (i.e. you find employment for a period), errors in submissions, or duplicate cheques being received (in some instances one from Service Canada, and one from the CRA).

The government has indicated that they will not treat fraudulent applications lightly, and a draft bill (which ultimately did not pass), had included $5,000 fines plus double the amount of the support claimed, and potential jail time proposed for individuals that were abusing the benefits. Although legislation did not pass to support these consequences, we expect that there will still be significant consequences for intentional abuses of the programs.

We will continue to provide updates as they become available. If you have any questions about these matters, please contact us.

To review any of our previous updates on COVID-19 please see our website.

This summary deals proposed matters that are complex and may not apply to particular facts and circumstances. As well, the material and the references contained therein reflect laws and practices which are subject to change. For these reasons, this material should not be relied upon as a substitute for specialized professional advice in connection with any particular matter.

Although this communication has been carefully prepared, Wilkinson & Company LLP does not accept any legal responsibility for its contents or for any consequences arising from its use.  No part of this document may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means (photocopying, electronic, mechanical, recording or otherwise).

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