'Not fair': CERB recipients who now have to pay the money back share their stories

Why CRA is demanding some Canadians to repay CERB A spokesperson with the CRA say notices are being sent to individuals who received CERB, but were later determined to be ineligible.

Two years after the federal government made the unprecedented move to give out swift financial assistance in the form of $2,000 per month to those who lost work in 2020 due to the pandemic, many Canadians are being told that they need to pay money back — including some who say they didn’t even apply for that particular benefit.

Many of those who received notice letters from the Canada Revenue Agency over the last few months told CTVNews.ca that they had no idea they would have to pay any of the benefit back, with some saying they are struggling to find the money.

As pandemic measures shuttered thousands of workplaces in the spring of 2020, the government launched a program called the Canada Emergency Response Benefit (CERB), aimed at aiding Canadians who had lost their jobs or couldn’t work due to COVID-19.

Those who qualified received $2,000 per month during the initial stage of the program, which has since ended.

But two years later, thousands of Canadians began to receive letters informing them that they needed to pay at least some of the money back, with many being told they had been ineligible for CERB in the first place or received too much money.

CTVNews.ca asked Canadians who had received a letter telling them they owed money related to CERB to share how this news was affecting them and their finances. The responses were emailed to CTVNews.ca and have not all been independently verified.

As of Wednesday, more than 250 emails were sent to CTVNews.ca, with many respondents noting their confusion and frustration.

“When I got laid off during the first wave of the COVID-19 pandemic, I thought CERB was a miracle,” Kaitlin Hartley said.

“But when I got a letter from the CRA recently telling me I needed to pay $2,000 back to them because I ‘shouldn't have received that much initially' my first thought was, 'This is a joke. This can't be real.’”

She said she’s struggling with a “mountain of debt” from schooling, as well as the payments of her daily life.

“I was shocked, then angry, and now I’m just sad. All I can think of is, I would never have accepted it, or I would have put it away if I had known the government was going to turn around during the hardest time of my life (personally and financially) and ask for this money back.”

Some respondents also stated that they hadn’t even applied for CERB — they had applied for employment insurance (EI) in early 2020 and were given CERB money instead.

When Kara Truelove, who lives in Winnipeg, Man., originally received the email telling her she owed $2,000 to the government, she thought it was a scam email at first, she told CTVNews.ca in a phone interview.

But quickly she realized what it was — the same email that a friend had told her they had received a month prior, which Truelove had thought was a fluke.

She had been finishing up her final practicum in nursing when the pandemic hit, and she lost the waitressing jobs that served as her income.

“I needed some sort of income,” she said. “So that's why I applied for the EI just like everybody else in the country.”

The fact that she didn’t want to receive CERB makes the situation all the more frustrating, she said.

“They gave me the CERB amount instead of what probably I should have got, ‘cause EI takes a percentage off of what you make, and so you only get 60 per cent of your wage,” she said. She believes that CERB became the default in this time because it was easier to calculate considering the deluge of people needing assistance.

“So I'm guessing that instead of them figuring that out for how many people were applying for EI, they just gave everybody this [same] amount of money.”

She said that if she had known she would end up owing money, “I wouldn’t even have applied for it,” and that the government should’ve been more transparent.

“I don't think they knew what they were doing,” she said. “And they realize that now and now they're trying to cover back up their tracks, but it's not fair because they're asking hardworking citizens for this money back, which they were never told that they were gonna have to do in the first place.”

The federal government and the CRA had previously stated that some CERB recipients may have to pay money back as reviews take place, but the CRA also said it would consider the “unique situations” of those who are struggling to repay the money.

Derek Rhodes said that he applied for EI after he was laid off from Air Canada in June 2020, but “was put onto CERB without my authorization.”

On Monday, the CRA sent a letter informing him that he had been “over paid” during the first month he was on CERB, but he contests that he was eligible for the full $2,000 during the month in question, and plans to reach out to CRA to state his case.

He added that his family had struggled for the past two years and that he’s only just gotten back to work with “a significant pay loss.”

“How are we going to pay this back when we are still drowning?” he said. “The government was supposed to help their people. Instead they are helping us fail.”

A construction worker in Oakville, Ont., said that his job site was shut down around the peak of the first wave of COVID-19 in March 2020. He applied for EI, before CERB had even been announced.

“All of a sudden, after I applied, I was notified by the government that instead of receiving EI, it'll be automatically changed to CERB,” Wally Azarcon said.

“Now I have to pay over $2,000 for CERB that I didn't originally apply for.”

FROM PANDEMIC GIFT TO A NIGHTMARE

For many, a sudden $2,000 charge hanging over their head is crushing.

Karen Mahler, who lives in High River, Alta., said that she isn’t sure she can afford to pay back thousands of dollars right now.

“We're struggling at the moment to stay fed, have a roof over our heads and gas in the car to get to work,” she wrote. “I just had stomach surgery last week and just applied for EI. I'm hoping none of this affects it.”

The government has stated that there is no interest on these repayments, and that Canadians can contact them to set up a payment schedule to slowly pay back the money that they owe.

A May 11 press release from the Canada Revenue Agency outlined how Canadians who have received one of these letters should proceed.

“If you are unable to pay your debt right now or unable to pay it at all, you should call the CRA to discuss your situation,” the release stated. “We understand that these may be challenging times and are here to assist you."

A 29-year-old from Saskatoon, Sask., said that he felt “stupid” for assuming that CERB would be only helpful.

“I wasn't expecting to have to pay back $2,000,” Elliott Kwok said. “I had never had to deal with a situation like this. I thought, foolishly, that the government had my back, and that like EI, I wouldn't have to pay this back because I had been let go from my job through no fault of my own, because of a pandemic.”

He added that he’s struggled with his mental health and has started and dropped out of school during the pandemic. He’s currently working two jobs to support himself and his fiancee.

“I can’t afford to pay it back and I don’t know where to go from here,” he said.

Some Canadians are alleging that they never even received any funds — and yet still are being told they owe money.

Ann Belshaw said that she “tried to apply for unemployment” after being laid off in March 2020.

When she was told that EI was not being offered and the only option was a CERB payment, she decided not to apply at all.

“A couple of months ago I started getting mail saying that I owe them $2,000 for a $2,000 payment that I did not receive,” she said.

“I spoke to someone on the phone and they said I just had to print out bank statements from April 2020 to prove that I did not receive anything. I have done this and sent it in, but I’m still receiving notices saying I owe them money. They are not answering my mail attempt to prove to them that I did not receive any money from them.”

FEDS SAY THIS WAS COMING

Officials say that it should not come as a surprise that some people are being told they owe money, and that the government had previously stated that anyone who incorrectly received funds would be required to return them.

“The Government has been clear throughout the pandemic that while there will not be any penalties for those who applied for these benefits in good faith, individuals will have to repay the emergency benefits for which they were not entitled,” the government said in a statement in early May.

The statement outlined that “Notices of Redetermination” were beginning to be issued in May to those deemed to have been ineligible for CERB or who are required to return money for some other reason.

Canadians have been receiving “Notices of Debt” starting last November. These were issued to those who received an “advance payment” of CERB but “did not remain on CERB long enough to fully reconcile that payment by applying for subsequent payment periods,” according to the statement.

Jade Stewart said in an email that her fiancee, Leo, received a Notice of Debt and that they were confused that the speediness of the first CERB payment had actually meant it was an advance payment that had to be repaid.

“None of this was stated when he applied for CERB and we paid taxes on this as well,” she said.

The couple, who lives in Sarnia, Ont., have had to postpone their wedding for two years due to COVID-19, and are finally set to have it this summer. But they’re struggling with costs piling up.

“We live pay check to pay check [sic], and with the cost of everything else, to have to pay $2000 that we thought was there to help us is going to be extremely hard on us,” she said.

Other Canadians reported that they were having trouble reaching Service Canada to get their questions answered.

Returning to work too quickly was another reason cited in many letters as to why Canadians needed to pay CERB money back.

One respondent from Salt Spring, B.C., said they were told in their letter that they weren’t allowed to work at all while on CERB, even though they had been earning under $1,000 a month, as specified in the CERB guidelines.

EXPERT ADVICE

Do Canadians have any recourse if they have received a letter asking for CERB repayment?

Jamie Golombek, managing director of tax and estate planning at CIBC Private Wealth Management, told CTVNews.ca in a phone interview that while you can challenge the letter if you truly believe a mistake has been made, most Canadians will have to pay back the money.

For Canadians receiving Notices of Redetermination that state they were found to be not qualified for CERB, it’s a matter of proving income.

“The biggest problem is that you had to have evidence that you earned at least $5,000 of either employment income or self employment income in the prior year,” Golombeck said. “Now that could be 2019, 2020, 2021, or the 12 month period prior to applying. And you also have to [have] been unable to work for at least 50 per cent of a normal work week. So typically, what's happening in these situations is that people applied and attested that they qualified, and then CRA now is getting around to checking the system, and they're seeing ‘oh, wait a minute, you didn't report $5,000 of income, what’s going on?’”

No one was reading the fine print on applications too closely in the initial panic of the beginning of the pandemic, he said.

“The initial concern of the government was to get payments out to people as quickly as possible for people who didn't have a source of income and they really needed the money to pay rent, buy groceries and things like that,” he said.

“I think initially there was a lot of confusions. I think people applied generally in good faith. They didn't fully understand the rules, and they went ahead and applied. They needed the money. They didn't have work, and they thought they qualified.”

But the government may have made mistake as well, he said.

“First you have to formally object and challenge the CRA,” he said. “You can ask the CRA for a formal review. They'll send an officer to review the case, you know, digitally or online or through telephone conversations. The officer will issue a decision and if you don't like that decision, you can have that reviewed by a second officer. That's a second level review. And then they’ll issue another decision and if that you don't like that decision, you have the right then to appeal the decision to federal court.”

The court can decide whether CRA’s decision was valid or not, but they may ask for it to be re-examined by another CRA officer, prolonging the situation even more.

Golombek said there haven’t been many cases that made it to court so far, and they generally haven’t gone in the taxpayer’s favour.

He said that for those who are trying to explain their case to the CRA, any kind of receipts showing their income, or cash deposits proving income, could be helpful as evidence.

“On the other hand, if you realize it was an honest mistake, and you really didn't qualify, pay the money back if you can afford to do that, or reach out to the CRA or the ESDC and work on a flexible payment arrangement,” he said. “Once again, there's no interest and no penalties. The government just wants the money back.”

With files from Melissa Lopez-Martinez