The CERB is similar to Employment Insurance (EI), but it is a flat benefit of $500 per week for up to 16 weeks. It is paid in $2000 chunks every four (4) weeks. This benefit is available to individuals who had at least $5000 income in 2019 or in the 12 months before you apply, whether or not you would qualify for traditional EI benefits. If you meet the above criteria and you have lost your income or your income has been significantly reduced as a result of COVID-19 can apply.
Details about who is eligible and the rules for applying change regularly. These details are accurate as of April 19, 2020. For an up-to-date list of who can apply, you can visit the Government site here.
There are some confusing details with CERB that make people wonder whether or not they can apply. Since the government is approving everyone, and checking eligibility at some point in the future that has made people nervous about applying.
The most important detail
You must re-apply for CERB every
four (4) weeks to receive your next payment.
Very Important detail #1
Changes this week allow people who earn up to $1000 every 4 weeks to now qualify for CERB.
$1000 is the amount of gross pay you are allowed, for
most people, this is not the amount you actually receive!
The amount of money that ends up in your bank account is usually your net pay. This is what you receive after income tax, EI, CPP and sometimes other things like union dues or health benefit premiums are deducted. You need to look at your pay statement to make sure that your gross pay is less than $1000 every 4 weeks or you may be required to pay back the CERB you receive.
Very Important detail #2
Just like Employment Insurance, and many other government benefits, the CERB is taxable income. As with most taxable government benefits, the money paid to you has no income tax taken off, which means you will pay tax on this income when you file your 2020 taxes in 2021.
For most of you, this will be a minimum of 25%,
or $500 of the $2000 you receive every four weeks.
You need the money right now, and you probably need it all.
If you were an employee in the early months of this year, your employer would’ve been withholding taxes based on your pay being the same for the entire year. Now that your income is reduced, the amount withheld by your employer is probably more than it needed to be, so you might have a cushion there.
If not, CRA typically allows personal tax filers to make payment plans of up to 12 months to pay the taxes owing after you file, and their interest rates are much better than your credit card! You just have to phone and ask.
Other important things to know
You cannot be on CERB and EI at the same time.
If you’re on EI, you need to wait for your EI benefits to expire before you apply for CERB.
COVID-19 related reasons must be why you stopped, or significantly reduced the amount you’re working.
If you quit your job voluntarily, you do not qualify for CERB.
You must live in Canada.
Canadian citizens living and working abroad, would not qualify.
You must be 15 years or older when you apply.
You earned $5,000 in 2019 or in the past 12 months from employment,
self-employment or government mat or pat leave benefits.
NEW THIS WEEK!
If you collected at least one (1) week of EI benefits since
December 29, 2019,
and are no longer eligible for EI, you can apply for CERB.