The Canada Emergency Response Benefit (CERB) provides emergency income to workers in Canada who have seen a drop in income as a result of COVID-19. This program is set to expire on October 3, 2020, after which it will be replaced by a temporarily-boosted employment insurance (EI) program and other, new emergency benefits. This article provides an overview of the program and what comes next.
- What is CERB?
CERB is an emergency economic program enacted by the Federal Government in the Canada Emergency Response Benefit Act and other government regulations under the Employment Insurance Act shortly after the start of the pandemic. It provides eligible workers in Canada with $500 per week to make up for income lost due to COVID-19-related reasons. There is no official limit on what a COVID-19-related reason is, but the examples that the Federal Government have provided include:
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- Loss of a job;
- Quarantine or illness due to COVID-19;
- Care of others who are in quarantine or sick due to COVID-19; or
- Care for children or other dependents because their care facility is closed due to COVID-19.
However, quitting a job voluntarily does not count as a COVID-19 related reason. There is also a risk that an employee will cease to have COVID-19 related reasons where they refuse a reasonable request to return to work made by their employer; however, Government guidance on this point remains vague.
The benefits paid under CERB are taxable income, meaning that tax must be paid on them in connection with the end of the 2020 tax year.
2. When Does CERB Run?
The program runs from March 15, 2020 to October 3, 2020. During that period, eligible people can claim up to 28 weeks of benefits (recently increased from an old limit of 24 weeks). Benefits are claimed in blocks of four-consecutive weeks, with each four-week period being set by the Government on the calendar as an “eligibility period”. For example, the first eligibility period was March 15th, 2020 to April 11, 2020, and the current period (the seventh) runs from August 30th, 2020 to September 26th, 2020.
The four week periods do not have to be consecutive four-week periods. For example, an applicant could go on CERB for 8 weeks in eligibility periods 1 and 2, find new work during periods 3 and 4, and go back on CERB in periods 5 and 6. The only limit is that the total cumulative time on CERB is limited to 28 weeks used before October 3, 2020.
3. Who is Eligible for CERB?
CERB is available for workers who meet all of the following requirements:
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- Reside in Canada (though they do not have to be a citizen or permanent resident);
- Are at least 15 years old; 3. Meet one of the following requirements::
- They stopped working after March 15th, 2020 because of reasons related to COVID-19;
- They are otherwise entitled to EI regular or sickness benefits; or
- They exhausted their EI benefits between December 29, 2019 and October 3, 2020;
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- Had an employment or self-employment income of at least $5,000 in 2019 or the 12 months prior to the date that they applied; and
- Have not quit their job voluntarily (which will disqualify an applicant from CERB).
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At the start of the CERB program, an employee could not earn any income for two consecutive weeks in the first eligibility period claimed, and no income whatsoever in the subsequent eligibility periods.
However, in late April, CERB was changed to permit applicants to earn some income. This opened CERB to those who suffered reduced hours due to COVID-19. In the first eligibility period of CERB an applicant cannot earn more than $1,000 in employment or self-employment income over a period of 14 or more consecutive days. In each subsequent eligibility period, they cannot earn more than $1,000 over the entire four-week period.
There is currently no requirement to seek out or accept work when on CERB (though the Federal Government is encouraging Canadians to return to work if able to do so).
4. How to Apply to CERB?
It is important to note that an applicant has to reapply for CERB every eligibility period – there is no automatic renewal.
Eligible workers can apply for CERB either through Service Canada or the Canada Revenue Agency (though not both). Applications can be made online, though other sources are available for those without internet access by calling 1-833-966-2099. Benefits are paid within ten days of applying.
Those who apply for CERB through Service Canada and who would otherwise receive Employment Insurance benefits will participate in CERB through a separate, nearly identical stream called the Employment Insurance Emergency Response Benefit (EI-ERB). The only major change is to the eligibility period. Under EI-ERB, an employee will be eligible for benefits if they are out of work for one whole week (consecutive days) in a two week period (as opposed to 14 consecutive days in a 28 day period under normal CERB). They may still earn up to $1,000 in a four-week period and be deemed to have ceased working during the relevant two week periods.
In addition, applicants receiving CERB through EI-ERB must complete bi-weekly reports to receive funding (either online or by phone).
5. How Does CERB interact with EI?
The program temporarily replaces normal employment insurance (EI) for most workers. Those applying for EI between March 15th, 2020 and October 3, 2020 will automatically have their application rerouted to CERB via the EI-ERB version of the program.
Canadians who are already receiving regular EI or sickness benefits would continue to receive their benefits and should not apply for the CERB. Workers cannot receive both benefits at the same time. If, however, a person’s EI benefits end before October 3, 2020, they may then apply for CERB.
Certain other employment insurance benefits other than regular and sickness benefits continue to be available at this time (such as maternity and parental benefits).
Canadians who exhaust CERB during the life of the program will remain eligible to apply for EI benefits afterwards.
6. How Does CERB Interact with Disability and Other Social Support Benefits?
While the Federal Government permits applicants to CERB to claim both CERB and disability or social support benefits, the Province of Ontario has put a partial-claw back in place.
In the event that a person claims both CERB and support through the Ontario Works program (OW) or the Ontario Disability Support Program (ODSP), Ontario will partially offset CERB from OW or ODSP benefits. An applicant is entitled to an exemption for the first $200 of CERB and 50% of every dollar thereafter.
7. What Comes After CERB?
To help Canadians who continue to be in need after October 3rd, the Federal Government has announced a number of changes to benefit programs (some of which will apply to Canadian employers):
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- EI premium rates will be frozen for a two-year period to protect businesses and workers from additional expense.
- EI eligibility will be expanded to encompass 400,000 new Canadians.
- Those on regular EI will receive a minimum taxable benefit of $400.00 per week (or $240.00 per week for extended parental benefits) – ensuring that those who rely on the $500.00 per week of EI will not have a sudden drop.
- EI regular benefits will now provide a minimum of 26 weeks of benefits regardless of the claimant’s geographic reason (a substantial increase for some parts of the country).
The Federal Government has also announced several new benefit programs (which will need to be implemented with supporting legislation):
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- A new Canada Recovery Benefit (CRB) of $400.00 per week for up to 26 weeks for self-employed workers or those who are not eligible for EI but still require support and are available and looking for work.
- A new Canada Recovery Sickness Benefit (CRSB) of $500.00 per week for up to two weeks for workers who are sick or must self-isolate for COVID-19 related reasons.
- A new Canada Recovery Caregiver Benefit (CRCB) that provides $500.00 per week for up to 26 weeks per household for eligible Canadians who are unable to work because they are caring for eligible dependents.
8. More Information
More details of the program can be found in the Federal Government’s detailed CERB Question & Answer Page online.
As always, PooranLaw will continue to monitor developments related to CERB and provide updates on our website. In the meantime, if you require legal assistance, we encourage you to reach out to your regular PooranLaw lawyer, or any member of our team.
Note: This article provides general information only and does not constitute, and should not be relied upon as, legal advice or opinion. PooranLaw Professional Corporation holds the copyright to this article and the article and its contents may not be copied or reproduced in any form, in whole or in part, without the express permission of PooranLaw Professional Corporation.
