COVID-19 hit the businesses of Canada hard. By the end of March, 44 per cent of Canadians reported lost work and 66 per cent of those employees were not being paid income. With a scant 20 per cent getting employer pay during isolation, millions of Canadians are in need of financial relief.
The Government of Canada has stepped up with several programs to help individuals and businesses afford necessities and help keep employees paid. Over the next few weeks we will look in detail at these programs and how they can benefit you. The situation, and the programs, are evolving. The Government of Canada’s website lists the most recent programs and any changes to them.
The Canada Emergency Response Benefit (CERB)
First up, let’s talk about the CERB. This is a sweeping program designed to catch those that don’t meet the criteria of the other assistance programs.
What is the CERB?
The CERB replaces its earlier iterations (Emergency Care Benefit and Emergency Support Benefit). It was created to offer broader, faster support to a wider range of people. CERB provides four months of support by way of a $2,000/month benefit. This support is taxable.
How does the taxable part affect me?
Canada Revenue Agency (CRA) considers this benefit as income. You are required to pay taxes on it as you would on any other income. To avoid a large tax bill in 2021, consider setting aside part of your CERB payment each month so you have the cash on hand to remit when CRA assesses your 2020 return.
How is CERB support issued?
The fastest way to get the payments is to be signed up with CRA for direct deposit. To do this, you need to be registered with My Account. Getting My Account takes some time as you must wait to be issued a code, so if you are not already signed up, do so without delay. If you do not have My Account, your payments will be issued to you through the mail.
Who is eligible for CERB?
To get and to keep getting CERB payments, you must:
- Not already be receiving EI
- Not have quit your job
- You must be at least 15 years old and living in Canada (not just visiting long-term)
- Between a combination of employment/self employment income and/or federal maternity/paternity leave benefits, you must have earned income of at least $5,000 in the last 12 month or during 2019.
- COVID-19 must be the reason you stopped working.
- For two consecutive weeks (during the period you are applying for) you must not be receiving income of any sort, including employment, self employment, or federal benefits.
- To continue receiving CERB support, must not be working due to COVID-19 restrictions, and you must not be receiving income from other sources.
How do I apply for the CERB?
For the initial intake, there were windows eligibility in which to apply. These window correlated to the month you were born in, with open enrollment on Fridays, Saturdays and Sundays. The first enrollment windows were between April 13-16. Remember, anyone can apply on Friday, Saturday and Sunday as the situation continues to evolve. The windows are in place to prevent the system, and the people operating it, from being overwhelmed by the demand. Check CRA’s site regularly for future windows that apply to you.
AF Accounting is here to help
Individuals and businesses will have many questions about income and small business support as COVID-19 continues its path of destruction. AF Accounting is here to help answer your questions and manage your CRA compliance. Call, email, and stay tuned to our blog as we continue to support you with our knowledge during this difficult time.