The Canadian Emergency Response Benefit Program (CERB)

On March 25, 2020, the Canadian government established the Canada Emergency Response Benefit (CERB) to help protect Canadian workers whose incomes may have been disrupted due to the COVID-19 pandemic.

O’Connor MacLeod Hanna LLP will provide answers to questions Canadians may have relating to CERB in the below FAQ. We are committed to providing up-to-date information about the CERB during these disruptive times and will endeavor to update the FAQ below as new information is announced.

1. What is the CERB?

The CERB is a temporary income support program for Canadian workers, both employed and self-employed, who have ceased working due to the COVID-19 pandemic.
The CERB provides a flat benefit for workers who have been out of work for at least 14 consecutive days in any four-week period for reasons relating to COVID-19. Specifically, the CERB is for workers who have been, amongst other things:

• Terminated or laid-off for reasons relating to COVID-19
• Are sick, quarantined, in self-isolation or taking care of someone who is sick with COVID-19
• Are working parents who must stay home without pay to care for children – or any other dependant – due to illness or school/daycare closures due to COVID-19

This list is non-exhaustive, and the Federal government will continue to update the particulars of CERB, including who is eligible for the program.

1.1 How much does the CERB offer?

The amount of income support payment for a week is fixed by regulation for that week and is payable each month. Currently, the fixed amount of support is set at $2,000 per month per applicant (also described as $500 per week). There is currently no distinction between workers and the amount of CERB payments they are eligible for. Accordingly, all eligible workers are entitled to the same $2,000 a month benefit.

The CERB is not an indefinite program. The maximum number of weeks for which income support payments may be made to a worker is 16 weeks (or roughly 4 months). Afterwards, workers should immediately apply for EI.

However, although the $2,000 amount is the current allowance, Bill C-13 has left power for the Minister of Employment and Social Development (the “Minister”) to fix the amount of an income support payment for a week specified in the regulation. Furthermore, the Minister may distinguish among different classes of workers. At this time, it is unclear exactly how these allowances for the Minister will impact CERB; however, it could mean that the fixed amount of $2000 per month could be varied and could be different depending on the class of worker.

1.2 CERB and EI

One cannot receive both CERB benefits and Employment Insurance (EI) benefits at the same time. If a worker is already receiving EI benefits, they will continue to receive these benefits until the end of their benefit period. If a worker has applied for EI benefits, but their application is still being processed, then the application will be now be processed as a CERB application.

If EI benefits started before March 15, 2020, and these benefits end before October 3, 2020, a worker may then apply for the CERB if they meet the eligibility requirements.

The benefits package under CERB appears to be less than regular EI payments for workers who earned over $54,200 per year. However, once the 16-week CERB program is up for a worker, they can return to their regular EI payments (assuming the worker is still eligible). Unfortunately, workers receiving payments under CERB will receive $2000 per month, regardless of what they may have been eligible to receive through EI – applicants cannot choose to receive EI instead of CERB during this period. Fortunately, if a worker was entitled to less than $2000 per month under EI, they will receive the full $2000 until the CERB payments finish.

Individuals will retain their eligibility to receive EI even after they have stopped receiving CERB payments. The payments they received under CERB will not impact EI entitlements.

2. Who is eligible?

In order to be eligible, the applicant must first meet the definition of a “worker” in accordance with Bill C-13. According to Bill C-13, a “worker” is a) a resident of Canada with a valid Social Insurance Number, b) at least 15 years or older, and c) has had a total income of at least $5,000 in 2019 or in the last 12 months prior to the application.

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 and/or similar benefits paid in Quebec under the Quebec Parental Insurance Plan. Furthermore, the income need not have been earned in Canada so long as the applicant is a Canadian resident. A worker is eligible for CERB if:

1. The worker ceases working for reasons related to COVID-19 for at least 14 consecutive days within the four-week period; and
2. During the days they have ceased working, they do not receive:
   1. Income from employment or self-employment;
      1. This includes income from paid leave or collection of any Employment Insurance benefits.
   2. Unemployment benefits (or ‘benefits’ as described in Parts I, VII.1 or VIII of the Employment Insurance Act);
   3. Allowances, money or any other benefits paid to the worker under a provincial plan because of pregnancy or in respect of the care by the worker of one or more of their new-born children or one or more children placed with them for the purpose of adoption; or
   4. Any other income that is prescribed by regulation and this Act.

The CERB applies to wage earners, contract workers and self-employed individuals. The worker does not have to have lost their job to qualify; they need only demonstrate they have not been working due to disruptions related to COVID-19. However, in subsequent applications (discussed in further detail, below), the worker must expect to receive no employment income to remain eligible.

At this time, an applicant’s eligibility for EI does not influence their eligibility for CERB. Furthermore, there is not restrictions for how many hours a worker has worked in order to be eligible for CERB.

Bill C-13 leaves power for the Minister to exclude a class of income from barring the application of CERB such that a worker may be eligible for CERB even if they have received some income from employment or self-employment. However, it is unknown at this time what class or type of income will be permitted for CERB applicants.

2.1 Temporary foreign workers

Workers who are not Canadian citizens or permanent residents – including temporary foreign workers and international students – may be eligible to receive CERB if they meet the other eligibility requirements. At this time, how this will be determined remains unclear.

2.2 Exclusions

2.2.1 Voluntarily quit

An unemployed worker, who may otherwise meet some of the above criteria, is excluded from eligibility if the worker had quit their employment voluntarily. Alternatively, an employee who quits involuntarily through constructive dismissal could still be eligible for CERB.

2.2.2 Students and previously unemployed

At this time, it appears that those seeking employment – including students about to graduate – will not be eligible for CERB. The official statement from CRA is that CERB is only available to individuals who stopped work as a result of reasons related to COVID-19. Accordingly, if an applicant was looking for a job but haven’t stopped working because of COVID-19, they are not eligible for the Benefit.

However, students who were about to graduate, and carried a part-time job during their academic years, may be eligible for CERB if they are unable to continue working due to disruptions relating to COVID-19.

2.3 Parental/Maternal benefits

Workers who are already receiving parental benefits from EI before the CERB’s implementation (March 15, 2020) will continue to receive EI and need not apply for CERB.

Workers who intend to apply for parental benefits under EI after March 15, 2020 should apply for CERB if they also meet the eligibility requirements described above. Workers should be aware of the EI timeline for parental benefits and maternal benefits and how that will impact applicability to EI and CERB.

3. Where and when can I apply?

The CERB is expected to be implemented on April 6, 2020, and the Government has announced that an online portal and telephone line will be available around this time through the CRA website. The CERB will be made retroactively to March 15, 2020 and will be available until October 3, 2020.

The CERB will replace all new applications for EI. Accordingly, if a worker has already applied for EI, and that application is still being processed, then those applications will automatically be converted into applications for CERB.

3.1 What must I provide in my application?

Applicants will be required to supply their Social Insurance Number, personal contact information, and will need to confirm they meet the eligibility requirements. Applicants do not need to provide a medical certificate to complete the application.

3.2 When will the applications be processed?

Applications will be processed within 3 - 10 days from when an application form is submitted. If the worker applies for direct deposit of funds, then payments will be made in 3 business days, whereas workers who do not sign up for direct deposit may have to wait approximately 10 business days.

3.3 Will applicants have to apply multiple times?

The CERB is not a ‘one and done’ application process. Workers will be required to re-apply every 4 weeks to confirm they still mean the eligibility requirements.

No worker will be able to apply for the CERB after December 2, 2020.

3.4 Best time to apply

To help manage applications, the CRA has set up specific days for workers to apply under the follow guidelines if you born in the month of:

• January – March: Apply for CERB on Mondays; April 6 th will be the best day to apply.
• April – June: Apply for CERB on Tuesdays; April 7 th will be the best day to apply.
• July – September: Apply for CERB on Wednesdays; April 8 th will be the best day to apply.
• October – December: Apply for CERB on Thursdays; April 9 th will be the best day to apply.

4. Is CERB taxable?

The CERB is technically a taxable benefit. However, the government has announced that tax recovery will be deferred until further notice. Canadians who have received CERB payments will be expected to report the Benefit as income when they file their income tax for the 2020 tax year

4.1 Can CERB payments be charged?

Payments made under CERB cannot be charged under any regulation. For instance, CERB payments are not subject to the operation of any law relating to bankruptcy or insolvency; cannot be assigned, charged, attached or given as security; cannot be retained by way of deduction, set-off or compensation under any Act or Parliament (other than Bill C-13); and CERB payments are not garnishable moneys for the purposes of Family Orders and Agreements Enforcement Assistance Act.

4.2 Is the CERB a loan?

The CERB is not a loan and does not need to be repaid.

5. Payments made in error

If the Minister determines that a worker has received CERB payments and were not entitled to those payments, or they received more than they were entitled to under this Act, then the worker must repay the amount as soon as feasible.

6. Can an employer top-up their employee’s CERB payments?

At this time, the federal government has not weighed in on whether this will be permitted.

The foregoing should not be considered to be legal advice and should not be relied upon as such. Please consult a lawyer to get advice and an opinion on your unique circumstances.