Over the past number of weeks, the Canadian government has announced various economic measures intended to stabilize the economy, provide individual financial support to workers and support businesses experiencing financial uncertainty in response to the global COVID-19 pandemic. We had previously advised Focus readers on the introduction of one of these measures – the Canada Emergency Response Benefit (see COVID-19 Emergency Response Act Receives Royal Assent), a program which was officially launched this morning.
On April 1, 2020 additional details regarding the Canada Emergency Response Benefit (the “CERB”) were announced, finally providing some clarity on a number of issues, including specifically the interplay between the CERB and the existing Employment Insurance (“EI”) system and various outstanding issues related to the administration of the CERB.
CERB and EI Benefits
Where a worker may be eligible to receive both the CERB and EI benefits as a result of COVID-19, they will be required to initially access the CERB for all claims filed on or after April 6, 2020, the date on which the applications system for the CERB becomes available.
Until April 6th, workers who are eligible for EI will be permitted to continue applying for EI through the existing process. Applicants who became eligible for EI benefits on or after March 15th will automatically be processed through the CERB system, with the exception of those unrelated to COVID-19, including, for example, pregnancy and parental leave. Workers who became eligible for EI benefits prior to March 15th will continue to be processed under the pre-existing EI rules.
The CERB will be available for the period from March 15, 2020 to October 3, 2020.
Eligible workers will be required to access the CERB first, even if it means that they might receive a lesser payment than what they might have been entitled to under the EI system. However, eligible workers who have received their entitlement under the CERB but who continue to be unable to work due to COVID-19 after October 3, 2020 may then be able to access EI at that time.
Of note, unlike with EI, workers do not have to be formally laid-off by their employer to access the CERB. Rather, they can remain “attached” to their employer, as long as they are without employment income as will be detailed below.
Administration of the CERB
The CERB program will be jointly administered by the Canada Revenue Agency and Service Canada. Applicants will be able to apply either through their CRA MyAccount for this purpose or by calling CRA’s toll-free automated line: 1-800-959-2019.
The eligibility criteria for applicants has been clarified so the CERB will be available to workers who:
- Reside in Canada, and who are at least 15 years old;
- Have stopped working because of COVID-19 or are eligible for Employment Insurance regular or sickness benefits;
- Had income of at least $5,000.00 (including from employment income, self-employment income, maternity or parental benefits, or a combination thereof) in 2019 on in the 12 months prior to their application; and
- Expects to be without employment or self-employment income for at least 14 consecutive days during their initial four (4) week claim period. For each subsequent benefit periods, they must expect to have no employment or self-employment income during the applicable four (4) week benefit period.
Applying for the CERB
Beginning on April 6th, applications for the CERB will be processed either online or by telephone. In order to avoid overwhelming the application system, however, applicants are asked to submit their application on a specific day of the week, depending on their month of birth. Specifically:
- Born between January and March, can apply on Mondays starting April 6
- Born between April and June, can apply on Tuesdays starting April 7
- Born between July and September, can apply on Wednesdays starting April 8
- Born between October and December, can apply on Thursdays starting April 9
- Born anytime, can apply on Fridays, Saturdays and Sundays
The application process is expected to entail providing personal contact information, including a valid social insurance number, as well as confirmation of eligibility for the CERB. Applicants may also be asked to provide documentation supporting their eligibility at a later date, though exact details have not yet been provided.
The benefit payments of $2,000 each will be paid in blocks of four (4) weeks up to a maximum of 16 weeks, equivalent to $500 per week. Workers in receipt of the CERB will be required to re-confirm their eligibility once monthly – or for each individual claim period – in order to continue to receive the benefit
Once an application is processed, eligible workers can expect to receive their benefit payment by cheque within ten (10) business days, or by direct deposit within three (3) business days. Though the CERB payment is taxable, recipients should be aware that no tax will be deducted from the payment at source.
In Our View
As the Canadian government continues to iron out the details of the measures announced as part of its COVID-19 Economic Response Plan, we expect further clarity on the CERB and other available federal benefits, including the interplay, if any, between the CERB and SUB Plan programs employers may already have in place. Emond Harnden LLP will continue to monitor relevant information as it becomes available, and a detailed guide on the issue will follow.
Additional information, including a Q&A on the CERB is available from Service Canada and the CRA through the following links:
https://www.canada.ca/en/services/benefits/ei/cerb-application.html
https://www.canada.ca/en/services/benefits/ei/cerb-application/questions.html
https://www.canada.ca/en/revenue-agency/services/benefits/apply-for-cerb-with-cra.html
For further information or advice on your rights and obligations as an employer when dealing with COVID-19 and similar issues, please contact Kecia Podetz at 613-940-2752, Colleen Dunlop at 613-940-2734, Lauren Jamieson at 613-563-7660 ext 236, Carolyn Dunlop at 613-940-2760 or Steven Williams at 613-940-2737.
