Yesterday Prime Minister Justin Trudeau announced the extension of the Canada Emergency Response Benefit (CERB) for a further 8 weeks, extending entitlement to a period of 24 weeks. Eligible applicants can now receive a maximum of $12,000 for the 24 week period, with a payment of $500 per week. The CERB was introduced to provide financial relief for Canadians impacted by COVID-19 and was available to both employed and self employed individuals. The CERB may be available if:
- The worker lives in Canada and is over 15 years of age
- Has stopped working due to COVID-19
- Had employment or self-employment income of at least $5,000 in 2019 or in the 12 months prior to the date of application
- Had not earned over $1000 in employment or self-employment income per benefit period while collecting the CERB payment; and
- Have not quit their jobs voluntarily.
The CERB is a taxable benefit and will be added to your total income for 2020. The tax for the benefit will be owed to the CRA when you file your taxes for 2021.
Applicants of the CERB should be aware that while there is a minimal verification process during the application process itself, the “clean-up” of potentially fraudulent benefit claims will happen when 2021 taxes are filed. This will involve CRA obtaining more detailed information than they normally receive from both employers and employees. Although the CRA has had a branch that deals with verification prior to COVID-19, the focus of the branch this year will be on verification of payments made based on COVID-19 benefits. The primary recourse for fraudulent claims will be a claw back of benefits paid.
This update was authored by Rose Keith, QC. Looking for more information on developments regarding the evolving COVID-19 pandemic? Contact Rose at email@example.com or anyone else listed on the authors page.