In response to the Canada Emergency Response Benefit (CERB) program ending at the end of September, the Federal Government has introduced three new programs that will run over the course of the upcoming year.
The following is a brief summary of the new Federal Recovery Benefits. More information will be released once legislation is passed.
Canada Recovery Benefit
The new Canada Recovery Benefit (CRB) would be effective from September 27, 2020, for one year and would provide a benefit amount of $400 per week for up to 26 weeks to workers who are not eligible for Employment Insurance (EI), mainly the self-employed and including those working in the gig economy. These individuals may still require income support if they continue to be unable to return to work due to COVID-19 or had their income reduced relative to pre-COVID-19 pandemic (attestation-based).
Residents of Canada who are eligible for the CRB include those who:
- Are at least 15 years old and have a valid Social Insurance Number (SIN);
- Have stopped working due to the COVID-19 pandemic and are available and looking for work; or are working and have had a reduction in their employment/self-employment income for reasons related to COVID-19;
- Are not eligible for EI;
- Had employment and/or self-employment income of at least $5,000 in 2019 or in 2020; and,
- Have not quit their job voluntarily.
Claimants would apply for CRB after every two-week period for which they are seeking income support and must attest that they continue to meet the requirements. In order to continue to be eligible for the benefit the claimant wound need to look for and accept work when it is reasonable to do so. The benefit would be taxable.
To encourage claimants to return to work, they would be able to earn income from employment and/or self-employment while receiving the benefit, as long as they continue to meet the other requirements. However, to ensure that the benefit targets those who need it most, claimants would need to repay some or all of the benefit through their income tax return if their annual net income, excluding the CRB payment, is over $38,000. In other words, claimants would need to repay $0.50 of the benefit for each dollar of their annual net income above $38,000 in the calendar year to a maximum of the amount of benefit they received.
This means that for a worker who received 10 weeks of the CRB in 2020 for a total of $4,000, they would have to repay all of the benefit if their net income exceeded the threshold by $8,000 (twice the benefit payment amount). In this example, the worker would have to repay the full benefit amount if their net income was greater than $46,000 (not including the CRB) in 2020.
Canada Recovery Sickness Benefit
The new Canada Recovery Sickness Benefit (CRSB) would provide $500 per week, for up to two weeks, effective September 27, 2020, for one year, for workers who are unable to work because they are sick or must self-isolate due to COVID-19.
The benefit would be available to:
- Residents in Canada who are at least 15 years of age and have a valid SIN;
- Workers employed or self-employed at the time of the application; and
- Workers who earned at least $5,000 in 2019 or in 2020.
Workers would not be required to have a medical certificate to qualify for the benefit and cannot claim the CRSB and receive other paid sick leave for the same benefit period. They would also need to have missed a minimum of 60% of their scheduled work in the week for which they claim the benefit.
Workers would apply after the one-week period in which they are seeking income support and attest that they meet the requirements. The benefit would be taxable.
Canada Recovery Caregiving Benefit
The new Canada Recovery Caregiver Benefit (CRCB), would be effective from September 27, 2020, for one year, and provide $500 per week, for up to 26 weeks per household to eligible Canadians unable to work because they need to provide care to children or support to other dependents who have to stay home because of COVID-19.
In order to be eligible for the Canada Recovery Caregiving Benefit, individuals would need to:
- Reside in Canada;
- Be at least 15 years of age on the first day of the period for which they apply for the benefit;
- Have a valid SIN;
- Be employed or self-employed on the day immediately preceding the period for which the application is made;
- Have earned at least $5,000 in 2019 or in 2020;
- Have been unable to work for at least 60% of their normally scheduled work within a given week because of one of the following conditions:
- they must take care of a child who is under 12 years of age on the first day of the period for which the benefit is claimed:
- because their school or daycare is closed or operates under an alternative schedule for reasons related to the COVID-19 pandemic;
- who cannot attend school or daycare under the advice of a medical professional due to being at high risk if they contract COVID-19; or
- because the caregiver who usually provides care is not available for reasons related to the COVID-19 pandemic; or
- they must provide care to a family member with a disability or a dependent:
- because their day program or care facility is closed or operates under an alternative schedule for reasons related to COVID-19;
- who cannot attend their day program or care facility under the advice of a medical professional due to being at high risk if they contract COVID-19; or
- because the caregiver who usually provides care is not available for reasons related to the COVID-19 pandemic;
- Not be in receipt of paid leave from an employer in respect of the same week; and
- Not be in receipt of the CERB, the EI Emergency Response Benefit (ERB), the CRB, the CRSB, short-term disability benefits, workers’ compensation benefits, or any EI benefits or Quebec Parental Insurance Plan (QPIP) benefits in respect of the same week.
Workers would apply after the period in which they are seeking income support and attest that they meet the requirements. Two members residing in the same household could not be in receipt of the benefit for the same period. The benefit would be taxable.