On August 20, 2020, the Government of Canada announced an extension of the Canada Emergency Response Benefit (CERB) by an additional 4 weeks for eligible workers, together with changes to the Employment Insurance (EI) program. The Government of Canada also intends to introduce legislation to create 3 new recovery benefits for workers unable to work as a result of the COVID-19 pandemic and its effects.
The information below is taken from the Government's August 20 News Release and accompanying Backgrounder, with the changes to the EI program made under Interim Order No. 7 Amending the Employment Insurance Act (Employment Insurance Emergency Response Benefit). It is expected that the legislation creating the new recovery benefits will be introduced shortly.
Update
The Government of Canada has taken further action to support workers who remain affected by the COVID-19 pandemic.
Further CERB extension
On August 20, 2020, the Government of Canada announced an extension of the CERB eligibility period by 4 weeks. Eligible workers will now be entitled to a maximum of 28 weeks of CERB payments, at the current flat-payment benefit rate of $2,000 for the 4-week period, or $500 per week.
As a reminder, the CERB is available only for the period between March 15, 2020 to October 3, 2020 and applicants can apply at any time before December 2, 2020.
Changes to the EI program
To support workers impacted by the COVID-19 pandemic, the Government of Canada will implement a number of temporary changes to the EI program to allow claimants to access EI benefits more easily, as follows:
- Qualifying Period Extension and One-time Insurable Hours Credit
The Government of Canada has provided an extension of the qualifying period for those transitioning to EI, with an extension of 16 weeks for claimants transitioning prior to July 5, 2020, and an extension of 24 weeks for those claimants transitioning to EI after July 5, 2020. The waiting period for regular, sickness and maternity/parental EI claimants has also been waived. Further, the Government of Canada will provide EI claimants with a one-time insurable hours credit of:
- 300 insurable hours for claims for regular EI benefits
- 480 insurable hours for claims for special EI benefits (sickness, maternity/parental, compassionate care or family caregiver)
This credit will be retroactive to March 15, 2020 and available for new EI claims for a one-year period. This credit will allow claimants to qualify for EI with a minimum of 120 hours of work in the year prior to their application, or since their last claim.
- Minimum Regional Unemployment Rate for Calculation
An unemployment rate of 13.1% will be used as the minimum rate for all EI economic regions, or such higher unemployment rate as applicable to the region for the period from August 9, 2020 until September 5, 2020. This minimum rate will:
- lower the number of insurable hours required to qualify for EI regular benefits to 420 hours for most claimants (before the insurable hours credit above is applied)
- provide a minimum entitlement of 26 weeks of regular EI benefits for claimants
- set 14 as the number of best weeks of earnings used in the calculation of the weekly benefit rate for EI claimants
- Implementation of Minimum Benefit Rate and EI Premium Rate Freeze
As of September 27, 2020, claimants receiving EI will be eligible for a taxable benefit rate of at least $400 per week (or $240 per week for extended parental benefits). Claimants who qualify for a higher EI benefit rate based on their average weekly earnings will still receive the higher rate.
The Government of Canada also announced it will freeze the EI insurance premium rates at the 2020 level for 2 years, keeping the employee rate of $1.58 per $100 of insurable earnings and the employer rate of $2.21 per $100 of insurable earnings.
Proposed New Recovery Benefits
The Government of Canada is proposing to implement 3 new recovery benefits to support workers who continue to face financial hardship as a result of the COVID-19 pandemic. These recovery benefits would each be effective from September 27, 2020 and would remain in effect for one year, as described below.
- The Canada Recovery Benefit (CRB)
The CRB will provide a taxable benefit of $400 per week for up to 26 weeks. Eligibility for the CRB would be limited to workers who (i) are at least 15 years old, (ii) have stopped working as a result of the COVID-19 pandemic (other than by voluntary resignation) and are available and looking for work or are working and have had a reduction in employment/self-employment income for reasons related to COVID-19, (iii) are not eligible for EI, and (iv) had employment and/or self-employment income of at least $5,000 in 2019 or in 2020.
Although claimants can work and receive the CRB, if a claimant's annual net income in the calendar year, excluding the CRB payment, exceeds $38,000, the claimant would need to repay $0.50 of the CRB payment for each $1.00 of income over this threshold.
CRB claimants would need to apply after every 2-week period and attest that they continue to meet the requirements.
- The Canada Recovery Sickness Benefit (CRSB)
The CRSB will provide workers with $500 per week for up to 2 weeks. Eligibility for the CRSB would be limited to workers who (i) are sick or must self-isolate for reasons related to COVID-19 (although no medical certificate would be required), (ii) are at least 15 years old, (iii) are employed or self-employed, and (iv) had employment and/or self-employment income of at least $5,000 in 2019 or in 2020.
Workers could not claim the CRSB and receive other paid sick leave for the same benefit period.
- The Canada Recovery Caregiving Benefit (CRCB)
The CRCB will provide $500 per week for up to 26 weeks per household. Eligibility for the CRCB would be limited to Canadian residents who (i) are at least 15 years old, (ii) have a valid SIN, (iii) are employed or self-employed, (iv) had employment and/or self-employment income of at least $5,000 in 2019 or in 2020, and (v) are unable to work because they must care for:
- a child under age 12 due to the closures of schools or daycares or unavailability of childcare because of COVID-19
- a family member with a disability or a dependent because their day program or care facility is closed due to COVID-19 or their usual caregiver is unavailable due to COVID-19.
- a child, a family member with a disability, or a dependent who cannot attend school, daycare, or other care facility under the advice of a medical professional due to being at high-risk if they contract COVID-19
The worker cannot be in receipt of paid leave from their employer or any other governmental benefit, short-term disability benefits or workers' compensation benefit in relation to the claim period.
Applications for the recovery benefits would be through the Canada Revenue Agency (CRA) and payable in arrears.
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.
