TORONTO -- When the pandemic hit with a vengeance the Canadian economy ground to a halt and we were shut down for business. The recent employment data crystallizes the seriousness of this situation with now approximately three million unemployed according to recent Statistics Canada job reports for the months of March and April with unemployment to punch higher likely in May as well. For those impacted, the Canadian Emergency Relief Benefit (CERB) that pays $2,000 per month has been a financial lifeline.

As days have blended into weeks it may be hard to believe we are now into the third phase of CERB qualifying period, which runs from May 10 through until June 6, 2020. The government has paid out nearly $30 billion in benefits so far and in an ideal situation those payments should begin to decline as the lockdown measures ease and businesses reopen.

The shift in the economic landscape with businesses reopening being helped, in part by support for employers coming from the 75 per cent Canada Emergency Wage Subsidy kicking in. And the good news, you may soon find yourself employed again.

What does this mean to you?

Now is the time to think seriously about when you might be in a position to re-enter the workforce. That leads to the next question: will you still be eligible for the CERB benefit? It is an important question because there is no double dipping allowed. You shouldn't receive the benefit and a salary. For now, the checks and balances in place by the CRA are light and the application process is very easy. Maybe too easy as some have received benefits they might not be entitled to.

While mistakes can happen you are far better to err on the side of caution and self-disclose to CRA if you receive a payment you aren't entitled to.

A few considerations?

  1. Don't apply if you think you will be working in the weeks ahead.
  2. Know that you will have to repay the CERB if you do not meet the eligibility requirements for the four-week period. This could be the case if you earned more than $1,000 in employment income or you applied for the CERB but later realized you weren't eligible, or you received a CERB payment from Service Canada and CRA for the same period.
  3. If you receive a payment you aren't entitled to -- return it. Simply mail it back to Sudbury Tax Centre, to the attention of Revenue Processing Repayment of CERB along with your social insurance number. By the way, the social insurance number is key -- that is the common denominator that will identify you and will red flag you if you receive a payment you weren't entitled to.
  4. If you received a direct deposit or you cashed your cheque and realized you received a payment you shouldn't or are simply having second thoughts just repay the amount. Starting May 11, there will be a new feature on the CRA My Account website to repay it.

To the extent you can -- tuck a little aside when you receive your payment. CERB is a taxable benefit and no tax is withheld at source like your employment income. You will receive a T4A slip for the amount of CERB payments to be included as income for 2020. If you repay a payment you weren't entitled to that amount will not be included.

As the pandemic eases and businesses reopen and the volume of applicants for benefits declines you can be sure audits will be conducted and if required, CRA will come calling.