There’s less than a month to go until the end of 2020, which means CERB repayments could be on the horizon for thousands of people.
Earlier this year, as a result of the COVID-19 pandemic, millions of Canadians applied for the Canada Emergency Response Benefit, otherwise known as the CERB.
While many eligible applicants have been allowed to keep that cash (although it is taxable), others will actually have to pay it back.
However, a new report from CTV News has revealed that others may also have to repay, particularly those who may have misunderstood the eligibility criteria in the original application.
What was the CERB eligibility criteria?
The CERB was created back in March to support those who were out of work or working reduced hours due to the pandemic.
To be eligible, an applicant must not have claimed other benefits (such as EI) during the same period.
Additionally, they must not have quit their job voluntarily, must reside in Canada and must be at least 15 years old, among other things.
The criteria also stated that a claimant must have earned a minimum of $5,000 pre-tax in the 12 months before applying, or in 2019 overall.
This included employment income, self-employment income and any provincial benefit payments related to maternity or parental leave.
It was this aspect of the application that caused confusion, according to CTV News.
What was the confusion?
Per the report, some Canadians who applied for the benefit are now being asked to repay, due to a miscommunication in the original CERB application.
The eligibility criteria stated that self-employed individuals were eligible for the support if they made over $5,000 in 2019 or in the 12 months before applying.
However, recent letters sent by the CRA have confirmed that “income” in this instance referred to net income, rather than gross income.
This means some Canadians who applied were eligible for the benefit per their gross income, but not their net income.
Those people will receive a letter from the CRA asking them to repay the benefit, as they do not actually qualify for the support.
While the CRA told CTV News that this interpretation is “consistent with how self-employment income is calculated” by their services, others argue that failing to include the word “net” has led to unnecessary confusion.
Who else may need to pay it back?
While a number of self-employed individuals may be required to pay back the CERB, they’re not the only ones.
The CRA expects that hundreds of thousands of Canadians will have to return some money, due to accidentally applying for the benefit twice.
Back in November, the government agency confirmed that up to 213,000 individuals may have claimed the CERB from both the CRA and Service Canada, resulting in double payments.
They acknowledged that most of these people probably applied twice by accident, but confirmed that anybody who received too much will have to repay the extra.
While the government isn’t enforcing repayments, they suggest returning the money before 2021 to avoid the sum appearing on the claimant’s tax slips next year.