In response to COVID-19 the government of Canada has introduced emergency aid to help employees, employees, and self-employed individuals who have lost their income or revenue due to the evolving coronavirus situation.
For more information about the government of Canada’s response, as well as measures enacted by provinces, to COVID-19 read What the COVID-19 Credits Mean for Your Small Business.
Here is a guide to help those who are self-employed and are in need of the Canadian Emergency Response Benefit (CERB).
What is CERB?
Introduced on March 18, CERB provides temporary income support of $500 per week for a maximum of 16 weeks for employees who have stopped working and are without income for reasons related to COVID-19. The benefit is available retroactively from March 15, 2020 to October 3, 2020. Those who are eligible can apply until Dec 2, 2020.
In order to apply for CERB you must meet the following criteria:
- Live in Canada and are at least 15 years old
- Stopped working due to COVID-19
- Earned income in 2019 or in the 12 months prior to the date of application of at least $5000
- Are, or expect to be, without income for at least 14 consecutive days
- Workers who are not Canadian citizens or permanent residents – including temporary foreign workers and international students – that present a 900 series SIN when applying may be eligible to receive the benefit if they meet the other eligibility requirements.
Reduced Schedule Eligibility
Those who have reduced schedules are not eligible for CERB. It is only available to individuals who have experienced a total loss of income for at least 14 days and continue to have no employment income for the duration of the claim period.
There are some exceptions to the rule including:
- You can earn up to $1000 per month while collecting CERB
- Seasonal workers who have exhausted their EI regular benefits and are unable to find a job or return to work because of CERB
- Workers who have recently exhausted their EI regular benefits and are unable to return to work or find a job because of COVID-19
How to Apply for CERB
To apply for CERB, self-employed workers must visit Canada.ca. and answer a few simple questions.
CERB Payments and Taxes
The CERB payments are considered income. Recipients will be required to report the benefit received as income when completing their 2020 tax return. As income tax varies for each person, the amount of tax an individual may owe will be based on their personal circumstances.
Should I apply for EI benefits or CERB?
All EI claims related to COVID-19 from March 15, 2020, onwards will automatically be transferred to the CERB. This includes claims that had been approved and claims that were still pending approval. No additional application for the CERB will be required if the employee had already started an EI claim.
The CERB will not impact EI entitlement. Following the 16-week CERB payment period, if an employee is still not able to return to work, they may apply for EI benefits.
Do employees require a Record of Employment (ROE) to apply for the CERB?
The CERB is available to both employees and self-employed workers who have lost employment as a result of COVID-19. An ROE is not required to apply for this benefit. The applicant just needs to provide their personal information and a valid SIN when applying.
Employers are still responsible for tracking and reporting interruptions in insurable employment and an ROE would be issued when an employee has, or is expected to have, seven or more days with no insurable hours or earnings.
Employees who were in insurable employment prior to the leave and utilize the full 16 weeks of CERB payments may be eligible for EI benefits if they are still unable to return to work. The ROE would be used in that case to validate their claim for benefits.
If my employer qualifies for the wage subsidy and I am collecting CERB benefits can I get both?
Under the proposed Canada Emergency Benefit, the employer is expected to add the laid off employees back on payroll and continue to pay the pre-crisis wages. This includes salary wages as well as any taxable benefits — with the exception of any stock options or personal use of a company vehicle.
There cannot be a combination of CERB and the Canada Emergency Wage Subsidy for employees of an employer.
If I realized I have been overpaid through CERB, what can I do repay the government?
An employee may want to return or repay the CERB if they return to work earlier than expected and applied for CERB but later realized they are not eligible.
If an employee still has the original CERB cheque, they can return the cheque by mail to the address below:
Revenue Processing – Repayment of CERB Sudbury Tax Centre
1050 Notre Dame Avenue
Sudbury ON P3A 0C1
If the employee was paid by direct deposit, they can mail their repayment by cheque to CRA and include the following:
- Make the payment out to “Receiver General for Canada”
- Indicate it is for “Repayment of CERB”
- Include your Social Insurance Number (SIN) or your Temporary Tax Number (TTN)
Have a Question About COVID-19 and its Impact on Your Pay?
The Canadian Payroll Association has made it possible for non-members to access the 200+ years of expertise on the Payroll InfoLine. You can submit your COVID-19 related payroll questions through email here.
For more information about CERB download COVID-19: Most Frequently Asked Questions from Payroll Infoline