Canada lost three million jobs due to the COVID-19 pandemic. Thousands of Canadians struggled to find work as the unemployment rate rose to a record high of 13.7% in May 2020. To combat this economic disaster, the federal government introduced the COVID-19 Emergency Response Benefit (CERB). This benefit offered Canadians $2,000 per month, to financially support those immediately affected by the virus.
Unfortunately, Canadians still feel the effects of the pandemic over a year later. Almost a year since Canada’s first lockdown, Canada lost another 213,000 jobs just in January 2021. And, women faced the brunt of that job loss.
However, there is light at the end of the tunnel. Some provinces removed many of their restrictions and businesses are beginning to open up again. The Government of Canada transitioned Canadians on CERB who were still unable to work to the Employment Insurance (EI) program on September 27, 2020. Those who aren’t eligible for EI benefits might be eligible for the Canada Recover Benefit (CRB).
What is the CRB?
The Canada Recovery Benefit (CRB) is income support for both employed and self-employed individuals whose work was directly impacted by COVID-19. Specifically, individuals eligible for CRB are not eligible for Employment Insurance (EI), as is the case for many self-employed individuals, for example. The Canada Revenue Agency (CRA) administers this benefit.
When the CRB originally came out, eligible CRB recipients were entitled to $1,000 ($900 after taxes) every 2 weeks, for 21 2-week periods. If a recipient received payments for 21 periods, or 42 weeks, they may be eligible to receive $600 every 2 weeks, or $540 after taxes. This is also true for individuals who apply after July 18, 2021.
Who is Eligible for the CRB?
To receive the CRB, you must meet the following criteria:
- You’re a Canadian resident
- You’re 15 years old or older
- You have a valid Social Insurance Number (SIN)
- For the CRB period you’re applying for:
- You were not employed or self-employed due to the effects of the COVID-19 pandemic
- You experienced a 50% loss in your average weekly income compared to last year
- You did not receive or apply for the Canada Recovery Sickness Benefit (CRSB), the Canada Recovery Caregiving Benefit (CRCB), short-term disability benefits, EI benefits, or Quebec Parental Insurance Plan (QPIP) benefits.
- You were not eligible for EI benefits
- You didn’t leave your job or reduce your hours on or after September 27. 2020, unless there was a valid reason for doing so.
- You were still seeking work during that period
- You haven’t turned down reasonable work during that period
- You weren’t in quarantine after international travel
- You earned a minimum of $5,000 in 2019, 2020, or 12 months before your application date from either:
- Employment income (gross pay)
- Net self-employment income
- Maternity and parental benefits from EI or QPIP benefits
Is the Government Still Issuing CRB Payments?
Yes. As part of Canada’s 2021 Budget, the Government of Canada proposed extending the CRB until September 25, 2021. Specifically, individuals who still need support can re-apply for 25 additional eligibility periods (2 weeks) between September 27, 2020, and September 25, 2021.
Eligible individuals who applied for 21 periods (2 weeks each) of CRB payments, or individuals who are applying for their first CRB between July 18 to 31 2021, might be eligible for more payments. However, these recipients will receive $600 ($540 after taxes withheld) every 2 weeks, instead of the original $1,000 every two weeks.
If you receive a CRB payment in error or if you applied and found out you don’t meet the eligibility criteria, you should learn how to return a payment.
Does the CRB Impact My Taxes?
Yes. It’s important to prepare for the CRB’s potential impact on your taxes. Unlike the CERB, the CRB withholds taxes upon payment at a 10% rate. So, a recipient of a $600 CRB payment will receive an adjusted payment of $540 to account for that 10% tax rate.
However, the 10% rate taken upon payment does not mean all individuals don’t have to pay anything come tax time. If your income is higher than the value of the CRB payments, you’ll likely have to pay more in tax during tax season.
If your income is more than $38,000, you’ll need to reimburse the CRA for some of the CRB. Specifically, CRB recipients must reimburse $0.50 of the CRB for every net dollar earned above $38,000.
The COVID-19 pandemic remains a nightmare for many employees and businesses. However, the federal government does offer some support. If you meet the criteria, you may want to apply for the Canada Recovery Benefit (CRB) to offset the burden of the pandemic on your finances.
If you’re still struggling with debt and budgeting as a result of the COVID-19 pandemic, our credit counsellors are still here to support you.