On March 25, 2020, the Government of Canada proposed legislation to establish the Canada Emergency Response Benefit (CERB) in order support workers and help businesses keep their employees. CERB is described as a simpler combination of the previously announced Emergency Care Benefit and Emergency Support Benefit.
How much assistance can I expect?
CERB is a taxable benefit that will provide Canadians impacted by COVID-19 $2,000 per month for the next four months.
When and where can I apply?
The federal government's goal is to create an online application portal or automated telephone system by April 6 and qualifying individuals would begin receiving CERB payments within 10 days of application. The CERB would be paid every four weeks and will be available until October 3, 2020.
Am I eligible for this benefit?
The benefit applies to any Canadian out of work due to reasons related to COVID-19, including for sickness, quarantine, caregiving, staying home to take care of children or loss of jobs. Furloughed workers, those who are still technically employed but not receiving income, would also qualify for the benefit. The benefit would cover wage-earners, contract workers and self-employed and gig industry individuals.
All Canadians who have ceased working, whether they are eligible for employment insurance or not, would be able to receive the benefit. Canadians who have yet to apply for federal income support will be able to decide whether to apply for CERB or Employment Insurance (EI) based on which may offer more financial support.
It would be prudent for applicants to determine if EI or CERB would be more beneficial to apply for based on your full-time hourly wage. Individuals currently receiving EI and sickness benefits would continue to receive their benefits and should not apply for the CERB. If their EI benefits end before October 3, they could apply for the CERB once their EI benefits cease, if they are unable to return to work.
Canadians who have already applied for EI and whose application has not yet been processed would not need to reapply for the CERB.
Is this benefit taxable?
Yes. The payments will be taxable income, and there will be a $200 income-tax deduction for a monthly total of $1,800.
What can I do right now?
Revenue Minister Diane Lebouthillier urged applicants to update their direct-deposit information with the Canada Revenue Agency (CRA). While the CRA will be administering the new benefit program, Service Canada will continue to handle EI claims.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
