In early 2020, during the height of the COVID-19 pandemic, 25.1 per cent of Canadians received $2,000 from the Canada Emergency Response Benefit (CERB), according to Statistics Canada. The CERB aimed to provide financial assistance to those whose jobs or livelihoods were impacted by the pandemic.
The only problem is that not all the people who received the payment were as eligible as they thought they were.
In 2021, Employment and Social Development Canada (ESDC) began issuing Notice of Debt letters (NoDs) requiring many CERB recipients to pay back all or a portion of their CERB advance payment. Today, I’ll give you some background about the CERB advance payment, eligibility for the benefit, and explain how repayment works.
The Canada Emergency Response Benefit advance payment
The unemployment rate reached a staggering 13.0 per cent during the height of the COVID-19 pandemic in April 2020, according to Statistics Canada. These individuals were left jobless with bills to pay, families to feed, and personal responsibilities to take care of.
Advance payments were then issued directly to applicants by ESDC, and those who applied on or after June 14 did not receive the $2,000 advance. Instead, those who applied for CERB through Service Canada after the cutoff date were issued standard CERB benefits by ESDC. Applicants who applied for the CERB through the CRA would have received their CERB payments from the CRA. Unlike ESDC, the CRA did not issue any CERB advance payments.
In order to expedite the process, the government of Canada took an attestation-based approach to issuing payments. This meant that applicants were responsible for making appropriate claims regarding their income and employment, with the knowledge that the claims would be verified in the future.
The government claimed that fines would not be issued to those who provided inaccurate information. However, these individuals would be required to repay amounts for which they were ineligible.
How did the CERB advance affect CRB Benefits?
The CERB advance was issued prior to the Canada Recovery Benefit (CRB), which offered payments of $1,000 or $600 for a two-week period between September 27, 2020 and October 23, 2021. Applicants who received the $2,000 CERB advance payment would have had the advance applied against other payment periods in June, July and August of 2020.
Recipients saw an interruption in payments in order to apply the money paid to weeks of eligibility. However, if recipients of the advance payment were not entitled to or did not collect CERB payments for at least 20 weeks, some or all of the advance payment remains as an outstanding balance owing.
The CRA was the sole administrator for the CRB Benefits and did not apply CRB benefits to any outstanding debts. Therefore, the CERB advance payment did not impact nor was it deducted from CRB payments.
Who was eligible for the CERB program?
The CERB was available to workers in Canada who met the following qualifications::
- Canadian resident
- At least 15 years old
- Had employment or self-employment income of at least $5,000 in 2019 or in the 12 months prior to their application
- Lost their job due to COVID-19
- Quit their job due to COVID-19 for health/safety reasons
- Exhausted their EI benefits between December 29, 2019 and October 3, 2020
Do you have to pay the CERB benefit back?
The CRA and ESDC may verify that you were eligible to receive the CERB. Upon review, the ESDC and CRA may determine that Canadians who received the CERB advance or regular CERB payment were not, in fact, eligible for the benefit. Those who were ineligible will need to repay any CERB benefits that they were not entitled to.
According to the government of Canada, payments were issued in the “good faith” that applicants were eligible.
CERB beneficiaries who were eligible to receive the payment are not required to repay the amount issued to them.
However, those who weren’t eligible for the benefit are now being required to pay the CERB benefit back, along with any ensuing CRB benefits that they may have wrongly taken.
In 2021, ESDC began issuing a Notice of Debt (NoD) to all Canadians who still had an outstanding balance of money owed from the CERB advance payment.
Beginning in May 2022, those who did not receive the CERB advance payment and instead received the standard CERB or CRB payment from the CRA may have been issued a Notice of Redetermination (NoR) notifying them of any debt that they owe the CRA.
If you believe that you may have mistakenly received a NoD from the ESDC or NoR from the CRA, then you should contact the department that issued the notice to verify your eligibility for the benefit. Otherwise, the debt will remain on your file, and may affect your eligibility for future benefits and tax refunds.
How do you pay the CERB back?
The NoD you received from ESDC should clearly outline the amount that you owe and should detail the payment options available to you. To repay your CERB advance issued by ESDC, you’ll need to repay the amount through your financial institution or mail.
Does CERB count as taxable income?
Yes, the CERB advance and most other COVID-19 benefits that were issued to Canadians all count as taxable income. This means that you were required to add them to your personal income tax returns for the 2020 tax year. Information slips were issued by the CRA (T4A) and by ESDC (T4E) to support the filing of your 2020 income tax return.If you have not filed your 2020 income tax returns yet, then you’ll need to include your CERB advance as part of your income and pay taxes on it accordingly.
CRA debt collection moving forward
If you are unable to repay the amount in full, you should contact the department that issued the payment to arrange a payment plan. If you fail to pay in full or enroll in a payment plan, though, you may continue receiving debt notices and may have the amount deducted from the tax refund that you would otherwise be entitled to in 2023.
Correction:
This column has been updated due to erroneous information. It was the ESDC, and not the CRA, which issued CERB advance payments and repayment requests.
