Most Canadians appreciated the way the Canadian government quickly responded to those in financial need at the start of the Pandemic. One of the ways they did this was with CERB ( Canada Emergency Response Benefit.)
A lot of people were in panic mode worrying about their finances and quickly applied for the CERB payment. The government responded quickly and didn’t put a lot of emphasis on verifying those that were eligible. As a result, a significant amount of people received payments that were not qualified for them. Now the government has had more time to scrutinize the applications they are demanding repayment.
Do You Need To Pay Back CERB?
There may have been some circumstances that led you into thinking you qualified for the CERB payment when in fact you were not. Some of the circumstances could have been:
- You didn’t realize that you were still going to be earning an income during the time you received your CERB payment.
- When you applied for the CERB payment you received them both from CRA and Insurance Canada.
- Made an application for the CERB payment before realizing you were not entitled to it.
The Eligibility Periods
CERB payments were made for periods starting from March 15 to September 26. For some people, they may have been eligible for some of the period but not all of them. Here is an example:
More Income Was Earned Than What You Expected.
For the period March 15 to April 11, you would not be eligible for a CERB payment covering this period if you earned an income over $1,000 for at least 14 days in a row during the four week period. Each period has its own criteria.
Received Double Payments
It may have been that you made one application for the CERB payment and received two cheques. The second payments received as duplicates need to be paid back.
Not Eligible
You will have to repay the CERB payment/s you were not qualified for.
Paying Back A COVID-19 Payment
How you pay back the CERB payment and to who will depend on where you received it from. For example, if your cheque came from CRA then your repayment will need to go back to them. The same applies to those received from service Canada. If you are not sure where you received your payments from there are some guidelines that will help you determine this. https://www.canada.ca/en/revenue-agency/services/benefits/apply-for-cerb-with-cra/return-payment.html
CERB Affects Your Taxes
What some may not realize is that any money they received from a CERB payment is taxable and needs to be declared on the 2020 tax returns. This can be a little complex for those who received payment and have to pay it back.
If the repayment is made before year-end and it is made in full then it will not affect the taxes.
If the repayment has not been made or is paid after December 31, 202o then taxes are owed on the entire CERB amount received. If the payment is made in 2021 then a tax adjustment for this will take place with the 2021 tax filing.
Taxes can be complicated even without having to think about CERB. I would be happy to complete and file your tax returns for you. Just contact me so we can discuss your needs.
