The Canada Emergency Response Benefit (CERB) is a temporary income support system set up by the Canadian government in light of the COVID-19 pandemic. Announced on March 25th as part of Canada’s Economic Response Plan, the purpose of the CERB is to put money in the hands of Canadians who have lost their job due to the ongoing pandemic.
The CERB provides workers with $500 every week for up to a maximum of 16 weeks. It is available for Canadians who:
- are at least 15 years old;
- reside within Canada;
- are unable to work due to COVID-19 and have not quit their job voluntarily;
- are not eligible for Employment Insurance (EI) or sickness benefits;
- have had an income of at least $5,000 in 2019 (or within the 12 months before applying), and;
- are expected not to be working or receiving income for at least 14 consecutive days within the initial four-week period.
The government hopes to get the money into the hands of Canadians as soon as possible, and both Service Canada and the Canadian Revenue Agency (CRA) are jointly working together to make this happen. Applications began as of April 6th, and Canadians were encouraged to apply based on their date of birth. For people born in January through March, Monday would’ve been the ideal day to register. Tuesday would have been the most suitable for those born in April through June, Wednesday for those born in July through September, and finally Thursday for people born in October through December. Friday through Sunday was available for anyone who did not apply on their specific day.
There are a couple of ways to apply, and depending on your situation, one method may be easier than the others. If you have filed your taxes in the past two years, you can log in to your CRA My Account and apply online. Even if you are awaiting a code to verify your account, you can apply for the benefit. For people who do not have a CRA My Account and have not filed their taxes, they can call the automated hotline at 1-800-959-2019.
Applying is easy and does not take long with any of these options. However, it is essential to note that service is unavailable between 3:00 am and 6:00 am. CRA agents are available to answer questions during business hours at 1-800-959-8281, but beware of long on-hold times due to an increase in inquiries.
On the other hand, Canadians can apply through Service Canada. To do this, they must fill out a form which is similar to applying for EI. After applying, benefits will become available within ten business days and are retroactive to the date of eligibility.
All Canadians are entitled to the full $2,000 per month no matter if the income they made while employed was more or less than this amount. In addition, this amount is taxable. This is a crucial point that most Canadians have failed to observe and what makes the CERB so different than EI.
With Employment Insurance, the government takes the tax off the amount that the Canadian receives. In contrast, the money obtained through the CERB is not taxed beforehand, and Canadians will be expected to claim this amount and pay the appropriate taxes on their 2020 return next year. This allows the government to get the money in the hands of the Canadians far quicker as they do not have to calculate tax amounts. Still, Canadians can expect to pay between $1,200 and $2,400 on the money they receive from the CERB depending on their tax bracket and how long they are eligible to receive the benefit for.
In a news release on March 25 regarding the benefit, Bill Morneau, the Minister of Finance, had this to say: “We know that people are worried about their health, their jobs and their financial situations. Our government is doing whatever it takes to protect the health and safety of Canadians, and to support workers, families and businesses. The Canada Emergency Response Benefit would make sure that money gets in the hands of workers as quickly as possible to support them in their time of need, and would help businesses keep their employees during this difficult period. Canadians can rest assured that the government stands ready to take any and all necessary actions as we continue to confront these challenging times together.”
If you have any additional questions about the Canada Emergency Response Benefit, and to apply, visit the official Government of Canada website.