Note this article is by a guest author who has requested to remain anonymous.
I need to start out by clarifying who I am, and who I am not. I am a Canadian citizen who remains employed throughout the COVID-19 crisis (touch wood). I am working from home. Previously I worked for the government, in a department adjacent to the one that manages the EI, but was not directly involved. I know the basic workings of the EI system, but am not privy to insider information. I have not applied for the CERB, nor do I intend to, as both my spouse and I continue to work.
I am writing this guide because I am adept at maneuvering the ins and outs of bureaucracy, and have been helping friends and acquaintances with their questions and concerns regarding benefits for individuals during this crisis. I only have the information that everyone else has, but have been talking it out with a lot of people, reading, researching, and feel confident that I can help you sort out a course of action and make sense of it all.
Overview of the CERB
The scope of this article is the Canada Emergency Response Benefit, or the CERB. I’ll provide links to other options and benefits at the end, but this benefit on its own is complex enough in its simplicity to warrant this focus.
Before we begin, I have to say that I’m very impressed at how quickly the CERB was rolled out. I know how long government can take on a project, and real reasons exist for that time and care, but this was a wonderful and brazen effort, which needs to be celebrated, despite the issues.
The bulk of the information following comes from the Canada’s COVID-19 Economic Response Plan website.
As the website states, “The benefit will be available to workers:
- Residing in Canada, who are at least 15 years old;
- Who have stopped working because of COVID-19 and have not voluntarily quit their job or are eligible for EI regular or sickness benefits;
- Who had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and
- Who are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period. For subsequent benefit periods, they expect to have no employment or self-employment income.”
Note that this is for ‘workers’, not business owners. That said, if you are self-employed and not incorporated, you qualify. Gig economy workers, this is also you.
Also note, you cannot have *any* employment income during this time. This is problematic to people in the gig economy, who may have had 80% of their work dry up, but still have some. That said, a plan has been hinted at that will expand the CERB to deal directly with that issue, but no information is available yet.
Another problematic issue is people who want to refuse work because they feel it is unsafe. If your employer is not closing shop or laying people off, refusing to work is quitting, and therefore ineligible for the CERB. It is wise to check your provincial or territorial government website to see what they consider to be essential services, because if the government has defined your industry as non-essential you may even be at risk of fines if your employer insists you show up to work regardless. Government orders to shelter in place supercede employer demands for your presence in this case, but currently there is no model for how this works in a CERB application.
The Canada Revenue Agency (CRA) and Service Canada, which manages the Employment Insurance system (EI), are both administering the CERB. When you can apply depends on when you were born:
If you have worked full-time for at least 4 months in the last year, or part-time for at least 8 months, then apply for the CERB through the EI system. For the purpose of EI, full-time is at least 30 hours a week, part-time is less than 30 hours a week.
If you have worked less than that, apply for the CERB through the CRA. To apply for the CERB through the CRA, you’ll need a My CRA Account. AND you’ll need to have completed your 2018 taxes, but not your 2019 taxes.
If you don’t have an account with CRA, you can get one here. If you do online banking, you can speed up the process by using a sign-in partner to sign up.
Once you begin applying for the CERB, you’ll find it goes quickly. I’ve had at least 3 people tell me that it took less than 5 minutes. One thing you’ll have to provide, if you don’t have that information already set up in your CRA account, is your banking information for direct deposit. I’m hearing reports that the cash is being deposited within 3 days.
EI or the CERB?
The CERB is $500/week for 4 months (16 weeks). EI is 55% of your gross pay up to a current maximum of $573/week for up to (I believe) 35 weeks (or 15 weeks for Medical EI). The way I see it, no one is going to be completely happy. A worker who would have been eligible for $573/week is going to be annoyed at $500/week. Someone who is getting their regular EI at $300/week is going to be annoyed that they’re not getting $500/week. (Okay, maybe the part-time worker who would have gotten $150/week is thrilled at the $500/week.)
The point is that people are asking “But am I getting the CERB or EI?” “If I’m getting the CERB, does that mean I’ll be eligible for EI afterwards?” “If I’m getting the CERB now, and not EI, and then get a job, can I still use my banked hours from this EI period on my next EI period if my job doesn’t last?” “If I’m eligible for $300/week in EI, but I’m being given $500/week now because of the CERB, will I have to pay the difference back later?”
All valid questions, and I’m sure those questions are being asked internally, but no information has come out on them yet.
The key thing to remember is that the CERB was rolled out quickly. As far as I can tell, it’s a fully automated system, with people applying and getting paid almost immediately. The EI system is NOT automated. Each application has to be processed by a human – and I can’t even begin to imagine the backlog they’re dealing with. So it made complete sense for the EI system to join up with the CRA’s CERB system, and just make sure Canadians had cash to live as soon as possible. I applaud that decision. It was fast, it was definitive, it was the right thing to do.
BUT, it has raised oh-so-many questions and concerns. What if I’m double dipping? What if they claw it back? What if…?
Did you apply for the CERB and get two $2000 payments? If yes, that was your March and April payments. Don’t worry about it. Expect 2 more.
Did you apply for EI, or had you applied for EI around the March 15th magic date? I know one person who got 3 payments: $500, $1000 and $2000. I’m assuming that was EI, EI and CERB.
It’s hard to tell. I’m making the assumption that if you check your My CRA and My Service Canada accounts, you will see effective dates attached to those payments. Watch those dates! If there is overlap, that will be where the problems are. Hold back some if not all of the apparent double- or over-payments, in case the government demands them back later. It has happened in other government programs, and it may well happen here.
Can you apply for the CERB if you’ve been looking for work? I don’t see why not, as long as you meet the eligibility requirements. You made $5k in the last 12 months? Your job options are fewer in your field because of the COVID-19 crisis? Your EI is tapped out? Again, I’m not a lawyer nor a government worker, but the eligibility criteria are very broad and the aim here is to cover more, rather than fewer, Canadians.
EI payments are notorious for not taking off enough taxes. The CERB payments have no deductions. Are they taxable? I’ve read some lawyers’ Q&As on this, and they’re saying yes, but that the government has “deferred payment”. Sigh. Expect to pay when you file your taxes. Put some of it aside, if you can, just in case. (25%? What bracket do you expect to be in for this year?)
Is it possible to get more CERB than you’re eligible for? Possibly.
Obviously, if you attempt to double-dip on EI and the CERB for the same time period, then yes. Any money you’re receiving is recorded next to your SIN, and at some point there will be a reckoning.
We may have to make the assumption that the government, having flung this benefit out with such reckless abandon, is not going to retaliate for any errors on their part by dramatically clawing back benefits. They might start pro-rating payments. They might, if you are a person who earned enough in their job to get $350/week for 30 weeks on EI, and they paid you $500/week for 16 weeks, cut back your remaining payments to even it out.
The point here is to try to conserve some of the funds you have coming in now for periods of lower income later.
The Act (An Act respecting certain measures in response to COVID-19) states that “No interest is payable on any amount owing to Her Majesty in right of Canada under this Act as a result of an erroneous payment or overpayment.” That does not mean that no principal is payable.
In Conclusion or TL;DR
When it comes to this current crisis, all levels of government in Canada are doing their best to marshal the resources Canadians will need to get through this. Three points stand out for me as the main advice I’d like people to take away:
- The CERB is pretty simple to navigate, made so on purpose to help as many people as possible.
- Because of its simplicity, the CERB has some major gray areas. Be smart, and don’t assume that this is anything other than a stopgap for Canadians to weather the crisis.
- Husband your resources as much as you can, because we don’t know how long this is all going to last, and how much the government might want back later.
A news article listing the benefits in each province, updated April 2, 2020
New Brunswick Provincial Resources – for business (none found for individuals)
Newfoundland Provincial Resources – no direct financial resources for individuals
Nunavut Territory Resources – no cases yet in Nunavut, but this is the link for information
The changes to the CERB announced today are live: On April 15, we announced changes to the eligibility rules to: Allow people 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 because of COVID-19. Extend the CERB to workers who have recently exhausted their EI regular benefits and are unable to find a job because of COVID-19.
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). If you start working again after you get a CERB payment, and then stop working, you need to re-apply for the CERB.
When you re-apply, you must confirm that for at least 14 days in a row, during the period you are applying for, you won’t receive: * employment income * self-employment income * provincial or federal benefits related to maternity or paternity leave.