Canada Emergency Response Benefit
The government has established the Canada Emergency Response Benefit (“CERB”). This taxable benefit will provide temporary income support to workers who have stopped working and are without employment or self-employment income for reasons related to COVID-19. Examples of stopping to work could include but are not limited to:
- You have been let go from your job or your hours have been reduced to zero;
- You are in quarantine or sick due to COVID-19;
- You are away from work to take care of others because they are in quarantine, sick due to COVID-19; and/or
- You are away from work to take care of children or other dependents whose care facility is closed due to COVID-19.
Note that you will not need a medical certificate to receive the CERB if you are quarantined or sick due to COVID-19.
The benefit will be available to workers:
- Residing in Canada, who are at least 15 years old and have a valid social insurance number;
- Who have stopped working because of COVID-19 or are eligible for Employment Insurance regular or sickness benefits:
- Who had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and
- Who are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period. For subsequent benefit periods, they expect to have no employment income.
The income of at least $5,000 may be from any or a combination of the following sources: employment; self-employment; maternity and parental benefits under the Employment Insurance program.
The CERB is only available to individuals who stopped work as a result of reasons related to COVID-19. You do not need to be laid off to access the CERB. Someone who quits their job voluntarily will not be eligible to claim the CERB. In addition, if you are looking for a job but haven’t stopped working because of COVID-19, you are not eligible for the Benefit.
For example, if you are a student who had a job last year and were planning on working this summer you do not qualify for the benefit.
The benefit will be paid in blocks of four weeks in the amount of $2,000, which is equivalent to $500 per week. A maximum 16 weeks of benefits can be paid.
The Benefit is taxable although tax will not be deducted at source. You will be expected to report the Benefit as income when you file your income tax for the 2020 tax year.
Starting on April 6, applications can be done through the Canada Revenue Agency (“CRA”) through the following link:
Due to the expected number of applications, the CRA has set up specific days for you to apply based in the month one was born, as follows:
- Those born in January, February and March are to apply on Mondays, starting April 6
- Those born in April, May and June are to apply on Tuesdays, starting April 7
- Those born in July, August and September are to apply on Wednesdays, starting April 8
- Those born in October, November and December are to apply on Thursdays, starting April 9
- Those born in any month can apply on Fridays, Saturdays and Sundays
To speed up the process it is recommended that the applicant access the above site and ensure that they are set up to apply prior to the application date.
Note that the CERB is available to workers (as defined above) whether or not they are eligible for Employment Insurance. If you are already receiving Employment Insurance regular benefits, you will continue to receive these benefits until the end of your benefit period. If these benefits end before October 3, 2020, you may then apply for the CERB if you meet the eligibility requirements, including that you have stopped work because of reasons related to COVID-19.
If you were eligible to Employment Insurance benefits that started before March 15, 2020, and these benefits end before October 3, 2020, you may then apply for the CERB if you meet the eligibility requirements, including that you have stopped work because of reasons related to COVID-19.
If you became eligible for Employment Insurance regular or sickness benefits after March 15th and your claim has not yet been processed, your claim will be processed under the CERB program. You will receive $500 per week, regardless of what you may have been eligible to receive through Employment Insurance. However, you retain your eligibility to receive for Employment Insurance after you stop receiving the Canada Emergency Response Benefit, and the period that you received the CERB does not impact your EI entitlement.
You cannot be paid Employment Insurance benefits and the CERB for the same period.
The government has stated that recipients will receive their CERB faster if the recipient has set up direct deposit with CRA. If the recipient is already receiving benefits or tax refunds from the government by direct deposit, then the CERB will be paid to that bank account. For those individuals that have not yet set up direct deposit, instructions can be found at the following website:
Canada Child Benefit
Eligible recipients who have been receiving the Canada Child Benefit (“CCB”) will receive $300 more per child with their regular May CCB payment. You do not have to reapply.
Goods and Services Tax credit payment
Eligible recipients who have been receiving the Goods and Services Tax Credit will receive one-time special payment by early May. The average additional benefit will be close to $400 for single individuals and close to $600 for couples. You do not have to reapply.
Filing and Paying Personal Taxes
The deadline for filing your 2019 personal tax return has been deferred from April 30, 2020 to June 1, 2020. Self-employed individuals and their spouses or common-law partners continue to have a June 15, 2020 filing deadline to file their 2019 personal returns.
The deadline to pay any balance due for your individual income tax, regardless of your filing deadline, has been extended from April 30, 2020, to September 1, 2020. This means you will not be assessed any penalties or interest if your balance due is paid by September 1, 2020.
Moratorium on the Repayment of Canada Student Loans
Effective March 30, the government is placing a six-month interest-free moratorium on the repayment of Canada Student Loans for all student loan borrowers. No payment will be required, and interest will not accrue during this time.
Students do not need to apply for the repayment pause.
Reduced minimum withdrawals for Registered Retirement Income Funds
The government is reducing the required minimum withdrawals from Registered Retirement Income Funds (RRIFs) by 25% for 2020.
Disclaimer: The COVID-19 Canadian tax policies in the above article are changing rapidly as the governments introduce new measures. Certain details have yet to be published. We will aim to update them as soon as they are available.