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Canada Emergency Response Benefit – Details and Eligibility

Last updated APRIL 8, 2020: Please note that tax policies are changing rapidly. We are updating this article as details are made available.

On March 25, 2020, the Canadian government outlined the Canada Emergency Response Benefit (CERB).

In this article, Stern Cohen Tax Partner Adam Morke summarizes the CERB and provides greater insight into its eligibility requirements.

Note: The CERB combines the previously announced Emergency Care Benefit and the Emergency Support Benefit.

What Is It?

  • The CERB is a $2,000 a month taxable benefit paid for up to 16 weeks for “workers” (defined below) who lose their income, but not necessarily their job, as a result of the COVID-19 pandemic.
  • The Government has noted that the EI system was not designed to process the unprecedented volume of applications received. Given this situation, all Canadians who have ceased working due to COVID-19, whether they are EI-eligible or not, would be able to receive the CERB to ensure they have timely access to the income support they need.

Who Qualifies?

  • A person must first meet the definition of a “worker” and then must require income support due to certain reasons related to COVID-19 (“eligible reasons”)
  • The definition of a “worker” is a person who:
    • Is at least 15 years of age;
    • Is a resident of Canada; and
    • In 2019 or in the 12-month period preceding the day they apply for the CERB has a total income of at least $5,000 from the following sources:
      • Employment income;
      • Self-employment income;
      • Non-eligible dividends;
      • Certain benefits paid under the Employment Insurance Act; and
      • Allowances, money or other benefits paid under a provincial plan because of pregnancy or in respect of the care by the person of one or more of their new-born children or one or more children placed with them for the purpose of adoption.
  • The eligible reasons for a worker to qualify for the CERB include:
    • The worker, whether employed or self-employed, ceases working (or expects to cease to work) for reasons related to COVID-19 for at least 14 consecutive days within the four-week period in respect of which they apply for the payment; and
    • They do not receive, in respect of the consecutive days on which they have ceased working,
      • subject to the regulations, income from employment or self-employment,
      • benefits, as defined in subsection 2(1) of the Employment Insurance Act,
      • allowances, money or other benefits paid to the worker under a provincial plan because of pregnancy or in respect of the care by the worker of one or more of their new-born children or one or more children placed with them for the purpose of adoption, or
      • any other income that is prescribed by regulation (in the future).

Who Does Not Qualify?

  • Anyone who quits their employment voluntarily
  • Non-residents of Canada
  • Anyone under the age of 15

If You Are Already Receiving Regular EI and Sickness Benefits

Canadians who are already receiving regular 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, 2020, they could apply for the CERB once their EI benefits cease, if they are unable to return to work due to COVID-19.

How to Apply

 

Read how to apply by visiting the CRA website here. We strongly recommend you sign up for direct deposit with the CRA.

Stay safe.

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Open Letter to Our MP's

The partners of Stern Cohen LLP are concerned about the small businesses in our community affected by the impact of COVID-19. We believe the Canadian government needs to act urgently to provide additional support to small businesses to help them survive. To this end, we have reached out to our MPs requesting they provide much needed support to small businesses. Below you’ll find our list of recommendations.

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