The New Canada Emergency Response Benefit

This blog was updated on April 17, 2019 to reflect expanded eligibility for the Canada Emergency Response Benefit announced by the Federal government on April 15, 2019.

On March 25, 2020, the federal government passed legislation introducing the new Canada Emergency Response Benefit (CERB). The CERB is intended to provide support to individuals who are unable to work for reasons related to COVID-19. Eligible applicants will be provided with $500 per week for up to 16 weeks.

The CERB is available from March 15, 2020 to October 3, 2020, however, individuals can apply up to December 2, 2020.

The CERB is taxable, although tax will not be deducted at source. Individuals will be expected to report the Benefit as income when filing their income tax for the 2020 tax year.

Who is Eligible for the CERB?

The CERB is available to workers who meet all 4 of the following requirements:

1. They reside in Canada and are at least 15 years old

• • Workers who are not Canadian citizens or permanent residents – including temporary foreign workers and international students – may be eligible to receive the Benefit if they meet other eligibility requirements.

2. They have stopped working because of COVID-19 or are eligible for Employment Insurance (EI) regular or sickness benefits or have exhausted their EI regular benefits between December           29, 2019 and October 3, 2020.

• • • Examples of stopping work for reasons related to COVID-19 could include, but are not limited to:
      • being let go from your job;
      • being in quarantine or sick due to COVID-19;
      • being away from work to take care of others because they are in quarantine or sick due to COVID-19; and/or
      • being away from work to take care of children or other dependents whose care facility is closed due to COVID-19

3. They had an income of at least $5,000 in 2019 or in the 12 months prior to the date of their application. This income may be from any or a combination of the following sources:

• • • • employment;
      • self-employment;
      • maternity and parental benefits under the EI program and/or similar benefits paid in Quebec under the Quebec Parental Insurance Plan;
      • Pensions, student loans and bursaries are not considered income and should not be included;
      • This income does not have to be earned in Canada, but the individual must reside in Canada

4. For the individual’s first claim, they 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 their claim, and for subsequent claims, they cannot have earned more than $1,000 in employment and/or self-employment income for the entire four-week period of their new claim.

Individuals who quit their jobs voluntarily are not eligible to receive the CERB.

How to apply for the CERB

Starting April 6, 2020, applicants can apply online with CRA My Account or by phone through an automated phone service. There will be a single online portal to assist with the application process. Each applicant will need to provide their personal contact information, their Social Insurance Number and confirm that they meet the eligibility requirements. Applicants may be asked to provide additional documentation to verify their eligibility at a future date. If the applicant provides direct deposit information, they can expect to receive payment within 3 days, and if not, it will take approximately 10 days to receive a cheque. Individuals will have to re-apply for each 4-week period, to a maximum of 16 weeks.

In order to manage the anticipated volume of applications, the government is requesting that individuals stagger their applications by birth month according to the following guidelines:

EI and the CERB

If an individual has stopped working because of COVID-19, they should apply for the CERB, whether or not they are eligible for EI. If an application for EI regular or sickness benefits was submitted on March 15, 2020 or later, the claim will be automatically processed through the CERB.

Anyone who was already in receipt of EI regular benefits will continue to receive these benefits until the end of their benefit period. If these benefits end before October 3, 2020, the individual may then apply for the CERB, if the eligibility requirements are met. Receipt of both EI benefits and the CERB for the same period is not permitted.

If an individual became eligible for EI regular or sickness benefits prior to March 15, 2020, their claim will be processed under the pre-existing EI rules. However, if the individual became eligible for EI regular or sickness benefits on March 15, 2020 or onward, their claim will be automatically processed through the CERB.

Unfortunately, even if an individual would be entitled to more than $500 per week through the EI program, they will only receive $500 per week when they apply for the CERB, but they will retain their eligibility to receive EI after they stop receiving the CERB, and the period that they received the CERB does not impact their EI entitlement. If an individual would have received less than $500 per week under the EI program, they will still receive $500 per week through the CERB.

Disclaimer: As always, this post does not constitute legal advice and we would encourage you to seek professional legal advice from one of our knowledgeable lawyers before making any decisions with respect to your own case.