Announcing COVID19 Emergency Benefits in Canada
On March 25, 2020, Prime Minister Justin Trudeau announced the Canada Emergency Response Benefit (CERB). As a result of the COVID-19 pandemic, economies around the world are facing difficult times. Canada is no exception.
While Employment Insurance (IE) and wage subsidies are in place to support some Canadians, many others are not able to access these programs. The CERB is intended to broaden access.
In a Department of Finance press release, we’re told that “The Government of Canada is taking strong, immediate and effective action to protect Canadians and the economy from the impacts of the global COVID-19 pandemic.” This benefit is one part of the government’s COVID-19 Economic Response Plan, in support of Canadian workers and businesses.
Details you need to know
The Emergency Care Benefit and the Emergency Support Benefit have been merged into the Canada Emergency Response Benefit (CERB). The CERB has been created as a simpler and more accessible combination to these previously announced supports.
The CERB has also been better integrated with the Employment Insurance program to allow workers to apply for benefits through a single window.
Who is covered by the Canada Emergency Response Benefit?
This new benefit will cover people who have lost their job, people who are sick or quarantined, people who are taking care of someone who is sick with COVID-19, and parents who must stay home without pay to care for children. The CERB merges two previously announced benefits and covers the the same groups as originally planned.
The new CERB also includes workers who have no income due to the COVID-19 slowdown, but who haven’t yet been officially laid off. It will cover wage-earners, salary-earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI).
Who qualifies to receive this?
To qualify, applicants must have had $5,000 in employment income, self-employment income, or maternity or parental leave benefits for 2019 or in the 12-month period preceding the day they make the application.
How much will the CERB pay?
The CERB will pay out $2,000 per month for up to four months. CERB payments will be made every four weeks and is available from March 15, 2020 until October 3, 2020.
Where can my employees apply?
The application form to apply for CERB will be available on April 6. If your staff have already applied for EI, they do not need to also apply for this new benefit, the claim will be automatically moved over to the CERB and they will receive the 16-week benefit. If needed, they can use their work hours, (the minimum number of paid work hours an employee must have work in the eligibility period in order to quality for EI,) to apply for additional benefits after October 3, 2020.
Employees can apply in one of these three ways:
- by accessing it on their CRA MyAccount secure portal;
- by accessing it from their secure My Service Canada Account; or
- by calling a toll-free number equipped with an automated application process (details to be announced).
Approved Canadians are expected begin receiving their CERB payments within 10 days of application.
What if my employee has already been laid off and applied for EI?
If your staff member is already receiving EI regular and sickness benefits as of March 25, 2020, they will continue to receive those benefits and should not apply to receive the CERB. If their EI benefits end, however, they could then apply for the CERB.
If they’ve already applied for EI, they do not need to reapply for the CERB. The claim will be automatically moved over to the CERB, and benefits will be paid from this program first. If needed, they can use their “hours of insurable employment” (details on EI eligibility available here) to apply for EI benefits after October 3, 2020.
What if my employees don’t qualify for EI?
Individuals who do not qualify for EI can qualify for the CERB instead if they had $5,000 in employment income, self-employment income, or maternity or parental leave benefits for 2019 or in the 12-month period preceding the day they make the application.
When will the benefits be paid?
The application is expected to be available April 6. Benefits should be delivered 10 days after the application form is submitted. The earliest an applicant could receive benefits through direct deposit is April 16th (or slightly later if by mail).
What if my employee is already receiving EI Benefits?
Employees already receiving EI will continue to receive EI benefits. If the EI benefits end before October 3rd, 2020, and they are still unable to return to work, they can apply to the CERB once the EI benefits run out.
What if the employee continues to be sick or unemployed after October 3, 2020?
For individuals with enough EI insurable hours (check eligibility here), they will still be able to access their normal EI benefits after the 16-week period covered by the CERB.
What about people whose job start date was pushed back because of COVID-19?
CERB will not apply to people who are unemployed seasonal workers or students who had an offer to start working on a later date that was pushed back because of COVID-19. CERB is only for employed or self-employed workers who “cease” working.
How will severance pay affect the CERB?
People who are terminated from work without cause because of COVID-19 are generally entitled to severance pay. Typically with regular EI, “you cannot get EI until the severance “period” expires. A severance “period” is the amount of “months” of pay a severance package is worth.” (Source: Dutton Employment Law)
When someone goes on EI, and later receives a severance package, they will have to pay Service Canada back for all of the EI they received in their severance period. Service Canada will backdate a severance package as if someone got this money the day they were terminated from work even if they negotiated it many months later.
While we are still collecting information for circumstances including severance, there is a chance that if someone is terminated because of COVID-19 business slowdowns, and they receive a severance package, they cannot receive the CERB until the severance expires. A more complex situation is if someone goes on CERB and later gets a severance. In this case, it is possible that their employer, or the employee, may have to pay back Service Canada for the CERB payments.
We will continue to closely follow all Government of Canada developments concerning this emergency benefit and other measures associated with EI regular and sickness benefits and temporary wage subsidies. You can find PaymentEvolution’s COVID-19 Checklist for Employers here. We will post more news and updates related to the COVID19 outbreak and financial supports for workers and businesses on the PaymentEvolution blog.
Have more questions?
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