What is a CERB repayment and how do I pay it?


Maxine McCreadie

October 12, 2021 12:46 pm GMT
The pandemic has hit millions of Canadians financially. Certain industries experienced a huge drop in demand which caused earnings to decrease. In response to this, the Government of Canada introduced the Canada Emergency Response Benefit (CERB), a scheme to offer financial support to people directly affected by COVID-19.

In this article we’ll explore CERB repayments, including what CERB is, whether it needs to be repaid, and how to repay your Canada Recovery Benefit.

What is Canada Emergency Response benefit (CERB)?

The Canada Emergency Response Benefit (CERB) is a financial support scheme launched by the Canadian Government to help people affected by COVID-19.

It’s designed as an income replacement benefit and can be paid out either through your Employment Insurance (EI), the Canada Pension Plan (CPP), or both.

CERB was first launched in April 2020, and was originally scheduled to provide support and interest relief for a period of four months. CERB was then extended for two months in June 2020, and a further month in August 2020.

Who was eligible for CERB?

Canada Emergency Response Benefit (CERB) was available to residents of Canada whose income was affected by COVID-19, so long as they met the following eligibility requirements:

  • Were current residents of Canada
  • Were over the age of 15
  • Were prevented from working due to COVID-19, OR were eligible for Employment Insurance (regular or sickness) benefits between December 29, 2019 and October 3, 2020
  • Took in an income of at least $5,000 in 2019 (or the 12 months prior to their application) from either employment or self-employment
  • Did not quit their jobs voluntarily
The level of the emergency benefits were dependent on the nature of your earnings loss. If you applied before September of 2019, you would receive a CERB payment of at least $500 per week, rising to $575 if you were in a higher earning bracket.

If you applied after November 20 of the same year, there was no minimum benefit amount – instead, you would receive a federal government benefit equivalent to 55% of your salary or weekly earnings, up to the maximum insurable earnings amount.

The CERB closed to applications on December 2, 2020. You can’t apply for this benefit any longer.

Could you get CERB if you were self-employed?

Yes, it was possible for self-employed people to qualify for the Canada Emergency Response Benefit as long as one of the following scenarios was true of you:

  • You owned a business that had to close as a direct result of COVID-19
  • You were a self-employed individual who came down with COVID-related symptoms but remained able to work
  • You were an independent contractor who couldn’t get work due to the pandemic, but you earned more than $1,000 pre-tax after March 15th 2o2o for work that was done in February
  • You were a self-employed individual who came down with a non-COVID-related illness after March 15th 2020 but you could still work
  • You were a self-employed individual eligible for Employment Insurance who became ill, although not necessarily with COVID, after March 15th 2020

If I applied for the CERB, do I have to repay?

COVID-19 was unprecedented, and caused millions of people in Canada to worry about their finances almost overnight.

In order to provide financial support quickly, the Government launched the Canada Emergency Recovery Benefit (CERB) for employed or self-employed individuals without initially demanding proof of eligibility.

It was decided that proof would be asked for at a later date, and it’s now estimated that hundreds of thousands of Canadians who received the CERB and other pandemic benefits may have been overpaid or completely ineligible.

The Government is now chasing down individuals who were paid in good faith without meeting the criteria, and the Canadian Revenue Agency (CRA) has sent over 500,000 letters seeking CERB repayment.

Do I have to repay CERB if I’m self-employed?

Gross self-employment income (vs net self-employment income)

The rules for CERB repayment are slightly different for the self-employed. If you applied for CERB as a self-employed person, you may have applied based on your gross income rather than your net income, which will affect whether you have to repay the benefit.

Your gross income is what you earn before taxes, deductions, and expenses, whereas your net income is what remains of your earnings once those deductions have been made. The CRA has stated that recipients of CERB should have based their applications on their net income, so if you have based yours on your gross income, you may be facing CERB repayment.

According to the CRA, you won’t have to repay any CERB benefits received if you meet all of the following criteria:

  • You received the CERB based on your self-employment income for an eligibility period between March 15, 2020 and September 26, 2020
  • You earned $5,000 or more in gross self-employment income (before taxes, deductions, and expenses) in 2019 or the 12 months before you applied for the CERB (also includes employment income and provincial benefit payments related to maternity or parental leave)
  • You met all the other CERB eligibility criteria
  • You filed both your 2019 and 2020 income tax return
If you don’t meet all the conditions above, you will need to return or repay the money you received.

How do I make my CERB repayment?

There are three ways to repay a Canada Emergency Response Benefit: Online, through online banking, or via post.

Repay the CERB online

To settle a CERB overpayment online, simply:

  • Visit the Canadian Government website
  • Log in to your ‘My CRA‘ account
  • Follow the steps

Repay the CERB with online banking

To repay a CERB directly from your online banking account, you should:

  • Sign in to your bank’s online portal
  • Under ‘Add a payee’, look for an option similar to ‘Canada Emergency Response Benefit’
  • Enter your 9-digit Social Insurance Number (SIN) as the CRA account number

Repay the CERB by post

In order to settle a CERB overpayment by mail, you’ll need to:

  • Make the cheque out to the ‘Receiver General for Canada’ and indicate it’s for a repayment of Canada Emergency Response Benefit (CERB)
  • Note the eligibility period you are looking to repay
  • Enclose your Social Insurance Number (SIN)
  • Address the Revenue Processing centre:
Revenue Processing

Sudbury Tax Centre

1050 Notre Dame Avenue

Sudbury ON P3A 0C3

What happens if I don’t pay back CERB repayments?

Canada Emergency Response Benefit repayments that aren’t repaid in full will be deducted from Canada Employment Insurance Benefits and Canada Pension Plan benefits.

For any Canada Recovery Benefit CERB repayment amount not paid within the 36 months, interest of 0.82% per month will begin to accumulate as well as a penalty fee up to 20%.

In order to avoid Canada Emergency Response Benefit (CERB) penalties and interest, you must repay Canada emergency response benefit CERB on time.

Where can I get debt advice and support with my finances?

Millions of people across Canada were made to feel financially insecure as a result of the coronavirus pandemic, and while the Canada Emergency Response Benefit provided temporary support, CERB repayment has the potential to drive thousands of people into further debt.

For friendly, non-judgmental debt advice that you can trust, call A. Fisher & Associates today.

Maxine McCreadie

Maxine is an accomplished financial writer, known for her expertise in the field of personal insolvency. Having worked in the international insolvency community for a number of years, she has gained a deep understanding of the intricacies of personal finance and the complexities of insolvency processes.

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