Updated April 6, 2020
On March 25, 2020, Parliament passed the Canada Emergency Response Benefit Act, establishing the Canada Emergency Response Benefit (“CERB”). The CERB will provide payments to workers who have lost their income due to the COVID-19 pandemic. The CERB combines the previously announced Emergency Care Benefit and Emergency Support Benefit.
The CERB is a taxable benefit [1] that would provide $2,000 per month, up to four months, to workers who have lost income as a result of the COVID-19 pandemic. To be eligible for the program, a worker must have made $5,000 of income in 2019 or in the twelve months prior to their application [2]. To be eligible for the benefit in a given month, the worker must also be in receipt of no prescribed types of income (including employment income) for 14 consecutive days as a result of COVID-19. Note that this does not cover employees who resign voluntarily.
It is important to note that the CERB would apply to a much broader range of workers than Employment Insurance (“EI”). In addition to EI eligible employees, it would cover contract workers and self-employed individuals (and certain other workers) in the following circumstances:
- Job loss;
- Illness;
- Quarantine;
- Workers who are taking care of someone who is sick with COVID-19;
- Parents who must stay home without pay to care for children (who are sick or at home because of school and daycare closures); and
- Workers who are employed, but are not receiving income due to disruptions to their work situation due to COVID-19.
Anyone who meets the above criteria and has a valid Social Security Number, whether they are eligible for Employment Insurance (EI) or not, will be able to receive the CERB retroactive to March 15, 2020. The CERB will run until October 3, 2020.
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, EI benefits end before October 3, 2020, individuals may apply for the CERB once EI benefits cease. Canadians who are eligible for EI regular and sickness benefits may still access normal EI benefits after the 4 months covered by CERB. At this time, all EI applications that have not already been processed are being rerouted into the CERB program.
At present, mere reductions in income can be compensated by the CERB in some cases but not others. For example, if an employee suffers a complete loss of income for the two-week qualifying period every month, and still gets paid the remaining two weeks, they can claim the CERB on top of that. However, if an employee only suffers a reduction but not a complete loss of income for those two weeks, and has full hours for the remainder of the month, they will not be eligible for the CERB. The Federal Government has reserved the right to adjust this later by regulation, but has not done so yet.
Unfortunately, CERB benefits cannot be topped up by the employer at this time. This is in contrast to EI, which can be topped up by an employer to 95% of normal weekly wages (so long as the employer registers a plan with the Canadian Government) [3]. However, the legislation creating the CERB allows the Federal Government to permit top-ups by regulation. We will continue to monitor the situation and update if and when top-ups are permitted.
The application for the CERB is now available online or by phone. Payments will be made through direct deposit (3-5 days) or by mail (10 days). Employees that already applied for EI and have not yet been processed need not apply again. The deadline for the application is December 2, 2020.
PooranLaw will continue to monitor the CERB as it develops and is implemented.
In the meantime, if you have any questions we encourage you to speak with your regular PooranLaw lawyer or any member of our team.
Federal Government News Release: https://www.canada.ca/en/department-finance/news/2020/03/introduces-canada-emergency-response-benefit-to-help-workers-and-businesses.html
Canada’s CERB Webpage: https://www.canada.ca/en/services/benefits/ei/cerb-application.html
[1] The CERB will be taxed if and when recipients recover their income.
[2] Workers must be residents of Canada who are at least 15 years of age, and who have earned at least $5,000 in 2019 or in the past 12 months from employment, self-employment, or EI maternity/parental benefits.
[3] See our prior article on EI Supplemental Unemployment Plans for more details: https://pooranlaw.com/covid-19-related-closures-and-layoffs-what-is-a-sub-plan-and-how-can-it-benefit-my-employees/
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.
