CERB & EI. Understand Canada’s new financial aid measures

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The Canadian government will expand its temporary financial aid actions to help millions of Canadians who have lost income due to the pandemic. Official information can be found on the Government of Canada website: canada.ca/en/department-finance/economic-response-plan

NOTE: New recovery benefits are subject to parliamentary approval.

After helping millions of Canadians who lost income due to the pandemic, the Canada Emergency Response Benefit (CERB) comes to an end.  

The Government of Canada has declared that a new and improved Employment Insurance (EI) program will reach about half of Canadians currently on the Canada Emergency Response Benefit (CERB), while a set of other temporary benefits will aim to cover many of those that currently do not. qualify for EI: Canada Recovery Benefit (CRB); Canada Recovery Sickness Benefit (CRSB) and Canada Recovery Caregiving Benefit (CRCB).

If you are confused about the transition from CERB to EI, or how to apply for the new temporary benefit programs, read on. We have some answers. 

According to the new government rules, as of September 27, 2020 you can qualify for the new IS if:

  • You have been employed for at least 120 insurable hours in the past 52 weeks;
  • You stopped working through no fault of your own;
  • You did not quit your job voluntarily;
  • You are ready, willing and able to work every day
  • (regular EI benefits);
  • You are temporarily unable to work while taking care of another person or yourself (EI maternity, parental, illness, compassionate care and family caregiver benefits);
  • Also, if you have already received CERB, the 52-week period will be extended.

If you are at CERB and think you qualify for EI

More than 2 million people currently at CERB will be eligible for EI, according to an analysis by the Canadian Center for Policy Alternatives. If you are currently at CERB, you must first find out if you are eligible for EI. You will also need an employment record from your previous employer and proof of at least 120 hours of work to qualify.   

For those who think they are eligible for EI, the next step is to find out if it will be transferred automatically. 

If you are receiving CERB through Service Canada, the process should be easy. But if you are receiving CERB through the Canada Revenue Agency (CRA), you will have to apply for EI, as it is administered by Service Canada. 

One of the biggest differences between CERB and EI is that, in the latter, you will have to self-report every two weeks; you need to be prepared to continually update your order to continue receiving assistance. Self-reporting is essentially giving “an account of your week”, showing that you are active, applying and being interviewed for work.

If you are considering enrolling in EI, it is recommended that you register as soon as possible. Your first EI payment may take a few weeks. 

If your request for assistance doesn’t seem to be moving, be proactive, make direct contact with Service Canada and check how your process is doing.

Unlike CERB, to receive EI aid you will need a Record of Employment (ROE) to prove that you have been fired. It is always recommended to check your ROE to make sure everything is correct, as errors or omissions – for example, if you do not specify that you were fired instead of being fired for cause – can prevent you from getting EI. 

If you are at CERB and do not qualify for EI

If you don’t qualify for EI – and almost 2 million of those currently at CERB don’t either – don’t despair. You may be entitled to three other temporary benefits, which will be available for one year. 

  • Canada Recovery Benefit (CRB): It makes available $ 500 a week for up to 26 weeks, for self-employed workers or those who do not qualify for Employment Insurance (EI) and who still need income support.
  • Canada Recovery Sickness Benefit (CRSB): It makes $ 500 a week available for up to two weeks, for workers who cannot work because they are sick or must isolate themselves for reasons related to COVID-19.
  • Canada Recovery Caregiving Benefit (CRCB): It provides $ 500 per week, for up to 26 weeks per family, to skilled workers who are unable to work because they need to care for children or family members due to the closure of schools, daycare centers or care facilities.

There is also another lesser known program called Working While on Claim. This program is for people who have returned to work, but with a lower salary than before they lost their job. It is administered through Service Canada and is technically part of the EI program.   

According to the Canadian Center for Policy Alternatives, 482,000 former CERB beneficiaries will not be eligible for EI or the new benefits. This group will be comprised mainly of low-income workers who earn less than $ 1,000 a month, but who technically returned to their pre-pandemic hours. 

 Like CERB, new recovery benefits are taxable. Also like CERB, if the government later finds out that you did not qualify for a benefit you received, you will have to return all the money you received in the next tax payment season. In addition, if you earn $ 38,000 or more in 2020, it is quite possible that you will have to return part of the benefits received in the year.  

Because of all these contingencies, it is recommended to set aside 20 to 25 percent of your income, if possible, or more. Also, it is important to make sure that you are not receiving overlapping benefits.

Still having doubts? Go to the government website for official information; make direct contact with Service Canada; seek professional advice. If you are unable to hire a professional, there are free options available, such as tax clinics or workshops offered by accountants and financial planners.

For more information go to: canada.ca/en/department-finance/economic-response-plan

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