Canada Recovery Benefits (CRB) – FAQ
(last update: October 16th, 2020)

The Canada Recovery Benefit (CRB) gives income support to employed and self-employed individuals who are directly affected by COVID-19 and are not entitled to Employment Insurance (EI) benefits. The CRB is administered by the Canada Revenue Agency (CRA).

If you are eligible for the CRB, you can receive $1,000 ($900 after taxes withheld) for a 2-week period.

If your situation continues past 2 weeks, you will need to apply again. You may apply up to a total of 13 eligibility periods (26 weeks) between September 27, 2020 and September 25, 2021.

 

Eligibility

Why are the Recovery Benefits replacing the Canada Emergency Recovery Benefit?

The Canada Emergency Response Benefit (CERB) was an important and necessary temporary response to support Canadians who stopped working because of COVID-19.

The CERB covered three broad circumstances where individuals would have had to stop working as a result of the COVID-19 pandemic, including:

  • their job not being available;
  • being sick, quarantined, or in self-isolation; or
  • having to care for a child or other family member requiring supervised care whose normal care facility was closed due to COVID or was sick with COVID-19.

As we safely restart Canada’s economy, the Government is transitioning most Canadians who still cannot work to a simplified Employment Insurance program, effective September 27, 2020.

For those who are not eligible to receive EI regular benefits, such as the self-employed, or those experiencing a reduction in income of at least 50% due to COVID-19, the Government is introducing the Canada Recovery Benefit. This temporary benefit will provide $500 per week (taxable) for up to 26 weeks between September 27, 2020 and September 25, 2021. To be eligible for the Benefit, you must be available and looking for work and must accept work, when it is reasonable to do so.

The Government is also introducing the temporary Canada Recovery Sickness Benefit and the Canada Recovery Caregiving Benefit.

These three Recovery benefits will ensure Canadians continue to have access to much needed tailored support similar to the CERB.

Can I receive the Recovery Benefits if I am not a citizen or a permanent resident?

Yes, as long as you are residing and present in Canada during the period for which you are claiming the benefits and meet the other eligibility criteria.

Can I receive the Recovery Benefits if I am a citizen of Canada but living abroad temporarily and couldn’t get home once the pandemic started?

No.

To be eligible for the Recovery Benefits, you must be residing and present in Canada during the period for which you claim the benefits.

Access

When can I access the Recovery Benefits?

Unlike the CERB and CESB, the recovery benefit periods are retroactive. This means that applicants can only apply for a recovery benefit after the period for which they’re applying has ended. In addition, applicants must apply within 60 days after the period for which they are applying has ended.

The CRA launched the application process for the Canada Recovery Sickness Benefit (CRSB) and the Canada Recovery Caregiving Benefit (CRCB) on October 5, 2020.

Applications for the Canada Recovery Benefit (CRB) will be accepted starting October 12, 2020.

How do I apply for the Recovery Benefits?

The best way to apply for any of the recovery benefits is online, via My Account. However, Canadians who do not have access to the internet can apply using the CRA’s automated bilingual toll-free phone lines: 1-800-959-2019 or 1-800-959-2041.

To obtain further information on how to apply for the recovery benefits visit the transitioning to new benefits web page.

Can I get more than one of the Recovery Benefits for the same period?

No.

You cannot claim more than one of the Recovery Benefits for the same period.

You may also not get the Recovery Benefits if you are getting Employment Insurance benefits, provincial maternity or parental benefits, or any other paid leave for the same period.

Can I get more than one of the Recovery Benefits between September 27, 2020 and September 25, 2021?

Yes, as long as you meet the relevant eligibility criteria.

However, you cannot claim more than one of the Recovery Benefits for the same period.

You may also not get the Recovery Benefits if you are getting Employment Insurance benefits, provincial maternity or parental benefits, or any other paid leave for the same period.

Can I access any EI benefits while receiving the Recovery Benefits?

No.

You cannot get the Recovery Benefits at the same time you are getting any Employment Insurance Benefits, provincial maternity or parental benefits, or any other paid leave.

Payment

When will I start receiving the Recovery Benefits? Will I get it as soon as I exhaust my CERB benefits?

The CRA launched the application process for the Canada Recovery Sickness Benefit (CRSB) and the Canada Recovery Caregiving Benefit (CRCB) on October 5, 2020. Applications for the Canada Recovery Benefit (CRB) will be accepted starting October 12, 2020.

Similar to Employment Insurance, these benefits will be paid on an arrears basis which mean CERB clients will be switching from being paid in advance of the period where you are unable to work to paying you after the period you could not work. With this switch, you will experience a break in payments. The length of the break will depend on which Benefit is being applied for and for what period.

Why is payment changing to arrears when the CERB was paid in advance for anticipated time unable to work?

The Recovery Benefits will be paid following the period where you were not working, to allow you to attest to the fact that you were unable to work for the time for which you are claiming the Benefit. This is consistent with how the Employment Insurance Benefits are administered. This will help ensure that people are getting the Benefits for a period for which they are entitled, and avoid the need to repay benefits if they apply but then are able to work.

How long do I have to apply for one of the Recovery Benefits after my period of not working?

The Recovery Benefits are available between September 27, 2020 and September 25, 2021.

You have 60 days to apply after the end of the period for which you need the benefit.

For example, if you couldn’t work due to COVID-19 for the two-week period between September 27 and October 10, 2020, you can apply for this two-week period until December 9, 2020.

Once I receive my first payment, can I assume that I will continue to receive my next payments without doing anything?

No, the renewal of payments will not be automatic.

A new application must be submitted for each eligibility period as you need to attest you were unable to work.

Taxation

What does “income tax withheld at source” mean?

“Income tax withheld at source” means that some of the $500 benefit amount will be withheld by the Canada Revenue Agency before you get your payment, which will be credited against any income tax you need to pay for the year.

This helps avoid a large unexpected tax bill at the end of the year.

No such deductions at source were applied to the CERB, to ensure that Canadians who required support received the maximum amount when they needed it. Individuals will still need to include the CERB payments they received on their 2020 tax returns, and could be subject to tax, depending on their overall income for the year.

How will you decide my tax rate?

The Canada Revenue Agency will apply a flat 10% deduction at source for the Recovery Benefits.

What should I expect when I file my taxes for 2020?

Both the CERB and the Recovery Benefits are taxable. At the end of the year, the Canada Revenue Agency will calculate the amount of tax you owe based on your total income including both the amounts received for the Canada Emergency Response Benefit and the Canada Recovery Benefit.

With respect to the clawback for the Canada Recovery Benefit, you will be required to repay $0.50 of the Benefit for every dollar in net income you earn above $38,000 (excluding the amount received for the Canada Recovery Benefit) to a maximum repayment of the Canada Recovery Benefit received in the year. Amounts repaid will not be included in your taxable income. This will be reconciled on your T1 tax return and the repayment will be incorporated in your total payable.

Canada Recovery Benefit (CRB)

Eligibility

Who is eligible for the Canada Recovery Benefit?

The Canada Recovery Benefit will be available to residents who are present in Canada for the two weeks in which they are applying for the Benefit and:

  • Are at least 15 years of age on the first day of the period which they are applying for the Benefit;
  • Have a valid Social Insurance Number (SIN);
  • Are not eligible for Employment Insurance;
  • Are not employed or self-employed due to the COVID-19 pandemic or are working and have had a reduction of at least 50 per cent in their employment/self-employment income for reasons related to COVID-19;
  • Are available and looking for work and who must accept work where it is reasonable to do so;
  • Had employment and/or self-employment income of at least $5,000 in 2019 or in 2020, or in the 12-month period prior to their first application for the Canada Recovery Benefit;
  • Have not quit their job voluntarily, unless it was reasonable to do so; and
  • Have not rejected a reasonable job offer, rejected a request to resume work or failed to resume work if self-employed where reasonable to do so.

You must apply after every 2 week period for which they are seeking income support and attest that you continue to meet the requirements.

To encourage people to work, you can earn income from employment and/or self-employment while receiving the Benefit, as long as you continue to meet the other requirements.

However, to ensure that the Benefit targets those who need it most, you will need to repay through your income tax return $0.50 of Benefit for every dollar of net income earned above an annual net income of $38,000 (excluding the amount received for the Canada Recovery Benefit), up to the total of the Canada Recovery Benefit you received in a calendar year. Amounts repaid will not be included in your taxable income.

How do I know whether to apply for EI benefits or the Canada Recovery Benefit?

If you have paid EI premiums as an employee and have at least 120 hours of insurable employment, you are likely eligible for Employment Insurance Benefits and should apply.

If you don’t have the minimum number of hours, you may be eligible to receive the Canada Recovery Benefit, if you meet the eligibility criteria.

For how many weeks can I receive the Canada Recovery Benefit?

The Canada Recovery Benefit is available for up to 26 weeks between September 27, 2020 and September 25, 2021.

I was receiving the Canada Emergency Response Benefit until the end of June and then found employment but, while still employed, I am being asked by my employer to work reduced work hours. Am I eligible for the Canada Recovery Benefit?

You may be eligible for the Canada Recovery Benefit if you have suffered a reduction in income of 50% or more due to COVID-19, and you meet all other eligibility criteria.

Can I get the Canada Recovery Benefit if I quit my job? What if I had a good reason to quit, such as harassment or unsafe working conditions?

If you quit your job or stop working after September 27, 2020 and it was not reasonable to do so, you will no longer be eligible to receive any support through the Canada Recovery Benefit.

What constitutes a reduction in income when compared to pre-COVID times? Does a $1 reduction count?

To be eligible for the Canada Recovery Benefit while still working, you must have suffered a reduction in average weekly income of at least 50% relative to pre-pandemic levels.

A loss of income is defined as a reduction in total average employment and self-employment income for the two-week benefit period compared to your average employment income for a two-week period the previous year.

To calculate your reduction in average income, you will be expected to use your:

  • annual net income for 2019 or the 12-month period prior to your application (if applying in 2020), or;
  • your annual net income for 2019 or in 2020 or the 12-month period prior to your application (if applying in 2021,)

Then divide it by 26 to determine your average earnings for a two-week period.

For example, Deborah had net income of $39,000 in 2019. To determine her average earnings for a two-week period prior to the pandemic, Deborah divides this amount by 26, producing $1,500. Because Deborah is currently earning only $700 every two weeks, she has suffered an income reduction of more than 50%, and is eligible to claim the Canada Recovery Benefit.

Can I receive the Canada Recovery Benefit if my job is still there but I don’t feel comfortable going to work as a result of risk associated with COVID-19?

No.

You should talk to your employer if you are worried about the safety of your working conditions.

  • If you work in a federally-regulated workplace, you may wish to consult your workplace health and safety committee or health and safety representative as well as the document Right to refuse dangerous work.
  • Otherwise, you may wish to consult the website for the department of labour in your province or territory for further information on your rights and the process you should follow.
  • The Canadian Centre for Occupational Health and Safety is another possible resource.

You can’t receive the Canada Recovery Benefit if you have voluntarily quit your job or stopped working after you first applied for the Benefit, unless it was reasonable to do so.

You also cannot get the Benefit if you do not return to work when:

  • it was reasonable to do so if your employer had made a request
  • you declined a reasonable offer to work that would have started in the eligibility period

If you quit your job or stop working after September 27, 2020and it was not reasonable to do so, you will no longer be eligible to receive any support through the Canada Recovery Benefit.

If you decline to return to work after you first received the Benefit and it was not reasonable to do so, the amount of time you can receive the Benefit will be reduced by 10 weeks.

Is having someone at home with a compromised immune system considered a reasonable reason to not work?

No.

Your employer must provide you with a safe work environment. Therefore, you are encouraged to discuss your concerns with your employer to find an approach that works.

Seasonal worker

I am a seasonal worker but I was not able to work my usual number of hours because of the pandemic, so I do not qualify for EI. Am I eligible for the Canada Recovery Benefit?

If you are not eligible for Employment Insurance and are not employed or self-employed due to the COVID-19 pandemic or are working and have had a reduction of at least 50 per cent in your employment/self-employment income for reasons related to COVID-19, you could be eligible to receive the Canada Recovery Benefit, as long as you meet all the other eligibility criteria.

This includes having earned at least $5,000 from employment or self-employment in the previous calendar year or the 12 months prior to your first application for the Canada Recovery Benefit. You will be required to repay $0.50 for every dollar in net income you earn above $38,000(excluding the amount received for the Canada Recovery Benefit) until you have repaid the full amount of the Canada Recovery Benefit you received. Amounts repaid will not be included in your taxable income.

Senior

I am a senior collecting a pension but supplementing with part-time work – am I eligible for the Canada Recovery Benefit?

If you are not eligible for Employment Insurance and are not employed or self-employed due to the COVID-19 pandemic or are working and have had a reduction of at least 50 per cent in your employment/self-employment income for reasons related to COVID-19,, you could be eligible to receive the Canada Recovery Benefit, as long as you meet all the other eligibility criteria.

This includes having earned at least $5,000 from employment or self-employment in the previous calendar year or the 12 months prior to your first application for the Canada Recovery Benefit. You will be required to repay $0.50 for every dollar in net income you earn above $38,000(excluding the amount received for the Canada Recovery Benefit) until you have repaid the full amount of the Canada Recovery Benefit you received. Amounts repaid will not be included in your taxable income.

Income

What constitutes the $5,000 in eligible employment/self employment income?

The $5,000 includes all employment and self-employment income. Employment income includes: tips you have declared as income; non-eligible dividends; honoraria (e.g., nominal amounts paid to emergency service volunteers); and royalties (e.g., paid to artists). Self-employment income is revenue from the self-employment less expenses incurred to earn that revenue.

You may also include maternity and parental benefits you received from the Employment Insurance program and/or similar benefits paid in Quebec under the Quebec Parental Insurance Plan.

Pensions, student loans and bursaries are not considered employment income and should not be included.

I entered the labour force late in 2019 so was not able to earn $5,000, but I would have been able to earn that much in 2020 if I hadn’t lost my job due to COVID. Do I qualify for the Canada Recovery Benefit?

No.

To be eligible to receive the Canada Recovery Benefit, you must have had employment and/or self-employment income of at least $5,000 in 2019 or in 2020, or in the 12-month period prior to your first application for the CRB.

If I am in receipt of dividends, am I eligible for the Canada Recovery Benefit?

To be eligible to receive the Canada Recovery Benefit, you must have had employment and/or self-employment income of at least $5,000 in 2019 or in 2020, or in the 12-month period prior to your first application for the CRB.

The $5,000 includes all employment and self-employment income, including non-eligible dividends.

Non-eligible dividends are generally those paid out of corporate income taxed at the small business rate.

If I am paid income after applying for the Canada Recovery Benefit for work undertaken previously, does it impact my ability to get the Benefit?

You may earn income from employment and/or self-employment while receiving the Canada Recovery Benefit, as long as you continue to meet the other requirements. This includes earning 50% or less of your previous income for a two-week period due to COVID-19.

However, you will be required to repay $0.50 of the Benefit for every dollar in net income you earn about $38,000 for the year (excluding the amount received for the Canada Recovery Benefit). This would include amounts you earned in the year prior to applying for the Canada Recovery Benefit.

Am I going to be penalized twice when I file my 2020 taxes – once for the taxes I owe for the CERB and once for any amount earned over $38,000?

At the end of the year, the Canada Revenue Agency will calculate the amount of tax you owe based on your total income including both the amounts received for the Canada Emergency Response Benefit and the Canada Recovery Benefit.

With respect to the clawback for the Canada Recovery Benefit, you will be required to repay $0.50 of the Benefit for every dollar in net income you earn above $38,000 (excluding the amount received for the Canada Recovery Benefit) to a maximum repayment of the Canada Recovery Benefit received in the year. Amounts repaid will not be included in your taxable income. This will be reconciled on your T1 tax return and the repayment will be incorporated in your total payable.

Seeking work

How do I prove I have been seeking work?

Consistent with the EI Program, you will be required to attest every two weeks that you have been actively looking for work and did not decline reasonable work opportunities.

What constitutes “when reasonable”?

The Government recognizes that each individual circumstance is unique.

Requiring that individuals seek and accept work when it is reasonable to do so reflects the expectation that individuals return to work as soon as possible, while allowing them to exercise sound judgement about their personal safety and that of their families, and the extent to which the work opportunity reasonably responds to their circumstances.

If I was working full time but can now only find part-time employment at a lower salary, does that constitute “when reasonable”? Do I have to accept the job?

The Government recognizes that each individual circumstance is unique.

Requiring that individuals seek and accept work when it is reasonable to do so reflects the expectation that individuals return to work as soon as possible, while allowing them to exercise sound judgement about their personal safety and that of their families, and the extent to which the work opportunity reasonably responds to their circumstances.

For example, accepting part-time work may be reasonable if it is with your previous employer at the same or similar pay, with the possibility to work more hours in the future. However, if the part-time work is not related to your skill set and offers a much lower salary, you could have reasonable grounds to refuse it.

The Canada Recovery Benefit is also available to individuals who have had at least a 50% reduction in income due to COVID-19, which means even if you accept a job with a lower salary you may still be eligible for the Benefit.

My employer has promised to hire me back as soon as they are able. Do I have to look for and accept other work, knowing that I have a guaranteed job?

Yes.

To be eligible for the Canada Recovery Benefit, you will be required to attest every two weeks that you are actively seeking work and did not decline reasonable work.

However, there could be circumstances where you could have reasonable grounds to turn down work. For example, if your previous employer has made you a firm offer to return to work in the near future (e.g., within a few weeks), you may have reasonable grounds to refuse other work offers.

Clawback

What constitutes the $38,000 in net income I am allowed to earn before I become subject to the repayment requirement?

You are allowed to earn up to $38,000 in net income (excluding the amount received for the Canada Recovery Benefit), before becoming subject to the repayment provision.

What do you mean by net income? What does this include?

Net income refers to your income as identified on line 23600 of your income tax and benefit return.

For the purpose of the Canada Recovery Benefit this includes all income earned from any source for which you would pay income tax, with the exception of benefits received for the Canada Recovery Benefit, payments from a registered disability plan, money received for the Canada Child Benefit and GST/HST credit.

Further information on non-taxable amounts as income can be found online.

What happens if I have net income over $38,000 in the tax year? How will the clawback of Canada Recovery Benefits occur?

Individuals who receive the Canada Recovery Benefit will need to repay some or all of the benefit through their income tax return if their annual net income, excluding the Canada Recovery Benefit payment, is over $38,000. In other words, you would need to repay $0.50 of the Benefit for each dollar of your annual net income above $38,000 in the calendar year to a maximum of the amount of benefit you received.

This will be reconciled when you file your taxes for that calendar year.

How will the clawback be calculated if I collect the Canada Recovery Benefit beginning in 2020 into 2021 (a new calendar year)? Do I get to earn up to $38,000 twice – once per calendar year?

Yes.

You can receive net income up to $38,000 in each calendar year (excluding the amount received for the Canada Recovery Benefit) before you will be subject to repayment of the Canada Recovery Benefit for that same year.

How will the clawback be calculated if I am self-employed and do not draw income from my business but rather rely on dividends?

The Canada Recovery Benefit repayment will kick in when your net income for the year (excluding Canada Recovery Benefit payments) is more than $38,000 for the year in which the benefits were received.

Taxable dividend amounts received in the year will be included in determining if the recipient’s net income exceeds this threshold.

 

 (source info: Canada.ca)

 

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Canada Recovery Benefits (CRB) Frequently Asked Questions (FAQ) – (Oct 16th, update) – *new