Following the fallout from COVID-19 and an unprecedented increase in Employment Insurance (EI) benefit applications, the federal government recently introduced a new benefit – the Canada Emergency Response Benefit (CERB).
The CERB provides relief to workers whether they are eligible for EI or not if they have lost their jobs, are sick, quarantined, or are taking care of someone who is sick with COVID-19.
It also provides benefits to parents who must stay home without pay to care for children; and contract workers and self-employed individuals who would not otherwise be eligible for EI.
Starting from April 6th, all workers who are unable to work due to COVID-19 are processed for temporary income support under the CERB, whether or not they qualify for EI. The CERB will provide $500 per week for up to 28 weeks (7 months).
The federal government is also looking at adjustments to the CERB program that will benefit students, workers with reduced hours, gig workers, contractors, volunteer firefighters, seasonal workers, home care workers, and others who do not qualify under the current rules.
The New Canada Recovery Benefit Replaced CERB
The Canada Recovery Benefit (CRB) will pay $400 per week for up to 26 weeks, or $1,600 per month.
In addition to the CRB, two other new benefits include the:
- Canada Recovery Caregiving Benefit that will offer $500 per week or $2,000 per month for up to 26 weeks to eligible Canadians who need to stay home to care for children due to daycare or school closures.
- Canada Recovery Siickness Benefit that will offer up to $500 per week for up to two weeks ($1,000 total) to workers who are sick or who need to isolate due to COVID-19.
The new CRB benefits kicked in starting on September 27, 2020.
Learn more about how to apply for the new Canada Recovery Benefit program.
CERB Extended From 16 Weeks to 28 Weeks
The CERB program has been extended for an additional 4 weeks. Under the previous rules, you could only receive CERB benefits for a maximum of 24 weeks i.e. 6 payment periods or $12,000 in total.
Under the new plan, CERB recipients now have access to up to 28 weeks of benefits and a total of $14,000 over a 7 month period if they are still unable to work.
The statistics at the end of August show that the CERB has paid more than $69 billion so far to 8.61 million applicants!
The last CERB payment period is on September 26th. After this date, the Feds plan to transition recipients of the CERB to the federal Employment Insurance program.
The new EI program will replace the CERB starting on September 27, 2020, and will provide income to eligible individuals who remain unable to work due to COVID-19. It will offer EI regular benefits of at least $400 per week for up to 26 weeks.
Self-employed individuals and gig workers who do not qualify for the new EI may qualify for the new Canada Recovery Benefit (CRB).
What is the Canada Emergency Response Benefit?
The Canada Emergency Response benefit will provide workers who have ceased working due to COVID-19 with temporary income support.
This benefit is a combination of two previously announced benefits – the Emergency Care Benefit and the Emergency Support Benefit.
It will provide a flat-rate benefit of $2,000 a month (i.e. $500 per week) for up to 6 months to eligible workers.
Who Qualifies for the CERB Benefit?
The CERB applies to wage earners, contract workers, and self-employed individuals who meet the following as per Canada.ca:
- Workers who must stop working due to COVID-19 and do not have access to paid leave or other income support
- Workers who are sick, quarantined or taking care of someone who is sick with COVID-19
- Working parents who must stay home without pay to care for children that are sick or need additional care because of school or daycare closures
- Workers who still have their employment but are not being paid because there is currently no sufficient work and their employer has asked them not to come to work
- Wage-earners and self-employed individuals, including contract workers, who would otherwise not be eligible for Employment Insurance
Applicants must have been out of work for at least 14 consecutive days within the 4-week period in which they apply for the payment.
They must also have earned at least $5,000 in 2019 or in the 12 months immediately preceding their application. This income can be from employment or self-employment, maternity or parental leave benefits.
You must also be a resident of Canada and at least 15 years of age or older.
Recent information provided by CRA is that you can count non-eligible dividends towards the $5,000 income requirement to be eligible for CERB
How Much Will I Get From the CERB?
You will receive $2,000 every four weeks for up to 6 months. The payment is made in blocks of 4 weeks. If your situation remains the same, you can re-apply for multiple 4-week periods for a total of 24 weeks.
CERB payments are expected to start within 10 days of application. Applicants who provide direct deposit information to their bank may be able to receive payments faster (within 3 business days).
If CRA does not have your direct deposit information on file, your payments will be automatically paid by cheque.
The benefit is expected to be available from March 15, 2020, until October 3, 2020. The CERB will be taxable.
How To Apply for the CERB
You are able to apply for the benefit online via CRA MyAccount and via an automated telephone number starting from Monday, April 6, 2020.
CRA MyAccount: Log in to your existing account and proceed as follows:
Make sure your direct deposit and mailing information is up to date.
If you have forgotten your CRA User ID and/or password, you can try recovering them using the ‘Forgot your user ID’ or ‘Forgot your password’ options.
If your CRA MyAccount is locked, you will need to use the automated phone service.
Alternatively, if you have a My Service Canada Account and you can access it, you can log in to that account and select the option to “Switch to Canada Revenue Agency.” This transfers you to CRA MyAccount and you can proceed as above from there.
Automated Phone Service: The telephone number to apply is 1-800-959-2019 or 1-800-959-2041. This number is available starting from April 6, 2020. You should have your SIN number and postal code available.
You will also be required to confirm the period you are applying for and declare that you qualify for the benefit.
Both of these services (CRA MyAccount and the telephone service) will be available 21 hours a day, 7 days a week. They will be closed for maintenance from 3:00 a.m. to 6:00 a.m. (Eastern time).
In order to make the CERB application process as seamless as possible, you should apply on the following days based on your month of birth:
CERB 4-Week Eligibility Periods
You may be eligible to apply for the CERB during the following 4-week cycles up to a maximum of 16 weeks total:
- CERB period #1: March 15, 2020, to April 11, 2020
- CERB period #2: April 12, 2020, to May 9, 2020
- CERB period #3: May 10, 2020, to June 6, 2020
- CERB period #4: June 7, 2020, to July 4, 2020
- CERB period #5: July 5, 2020, to August 1, 2020 (can start applying from July 6)
- CERB period #6: August 2, 2020, to August 29, 2020 (can start applying from August 3)
- CERB period #7: August 30, 2020, to September 26, 2020 (can start applying from August 31)
You won’t automatically get the next CERB payment. If you still meet the eligibility requirements, you will need to apply for the next four-week period.
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CERB vs. EI
EI is administered by Service Canada while CERB will be managed by the Canada Revenue Agency and Employment and Social Development Canada (ESDC).
If you are already receiving EI regular or sickness benefits, they will continue and there’s no need to apply for the CERB.
If your EI benefit ends before October 3, 2020, you can apply for the CERB if you are still unable to work.
If you have already applied for EI and your application has not yet been processed, it will automatically be considered for the CERB in April. There’s no need to re-apply.
If you qualify for EI, you can apply through the regular application portal i.e. My Service Canada Account for regular EI benefits after the 16-week period covered by the CERB ends and you are still unemployed.
General EI benefits take about 28 days to process. The CERB will offer faster payments at 10 days following your application.
Is The CERB Taxable?
Yes, the CERB benefit is taxable and you will have to declare the income when you file your 2020 tax return in 2021.
An information slip will be made available for the 2020 tax year in your CRA MyAccount under Tax Information Slips (T4 and more).
I have received a ton of questions regarding the eligibility requirements. While the CERB program will likely be tweaked in the future, the eligibility criteria applicable as of now is shown below in the CRA application page screenshot:
Also, note that if you are receiving EI or CERB through Service Canada, you will still need to continue sending your bi-weekly EI reporting.
How do I pay back CERB?
A lot of folks have been asking about what to do if they apply for the CERB and later realize that they do not qualify for the benefit.
In that case, you will need to return the funds to CRA. Here is what you can do:
1. If you still have the cheque, simply send it back to:
Revenue Processing – Repayment of CERB
Sudbury Tax Centre
1050 Notre Dame Avenue
Sudbury ON P3A 0C1
2. If you don’t have the cheque or you were paid by direct deposit into your bank, you can write a cheque payable to the “Receiver General for Canada” and send it to the address above. Make sure to indicate that the cheque is for the repayment of CERB and include your SIN or TTN for identification purposes.
Can I work and still collect CERB?
You can earn up to $1,000 and be eligible to apply for the CERB.
Recent updates to the CERB now allow applicants to earn up to $1,000 in employment/self-employment income for 14 days or more within the 4-week CERB benefit cycle they are applying for.
As per Service Canada/CRA:
When submitting your first claim, you cannot have earned more than $1,000 in employment and/or self-employment income for 14 or more consecutive days within the four-week benefit period of your claim.
When submitting subsequent claims, you cannot have earned more than $1,000 in employment and/or self-employment income for the entire four-week benefit period of your new claim.
Also, you can apply for the CERB if you:
- Were formerly on EI and have used up your entitlement to EI regular benefits between December 29, 2019, and October 3, 2020; or
- You are eligible for EI sickness benefits
Can you receive CERB while on maternity or parental leave?
If your maternity or parental benefits have ended and you cannot return to work, you would qualify for CERB if you meet the other eligibility requirements.
Note that you cannot receive maternity or parental benefits at the same time as the Canada Emergency Response Benefit.
Canada Emergency Student Benefit (CESB)
On April 22, 2020, the federal government announced up to $9 billion in CESB and other relief for post-secondary students and recent graduates.
Starting in May 2020, students who are making less than $1,000 can qualify for $1,250 a month from May through August 2020. Students who meet the requirements and are caregivers or are disabled will get up to $2,000 per month.
In addition, students who volunteer in their communities during the summer can earn up to $5,000 in compensation based on the hours they put in. The benefits are only available to students who are Canadian citizens or permanent residents.
The maximum weekly amount available via the Canada Student Loans Program has also been increased to $350 from $210, and over $75 million is being allocated to support Indigenous post-secondary students.
Fraudulent CERB, CESB and CEWS Reporting
CRA recently added the CERB, CESB, and CEWS benefit programs to its Leads Program that encourages the reporting of tax and benefits cheats.
You can learn more about the program here.