IF YOU WERE HOPING TO APPLY FOR ONE OF MANY COVID FINANCIAL AID BENEFITS ON MAY 1, OTTAWA HAS ONE WARNING: FILE YOUR 2020 TAXES BY THE END OF THE MONTH, OR RISK A LONG WAIT BEFORE YOU GET YOUR MONEY.

Benefits delay could be up to two months

OTTAWA • If you were hoping to apply for one of many COVID-19 financial aid benefits on May 1, the federal government has one warning: file your 2020 taxes by the end of the month, or risk a long wait before you get your money (and even being cut off ).

“It is essential that you file your 2020 personal income tax and benefit return by April 30, 2021,” warns the Canada Revenue Agency from the get-go in a “tax tip” published Wednesday.

Though one could argue that it's always important to file one's taxes on time, it's of particular importance to do it before the deadline this year for anyone who thinks they will claim either the Canada Recovery Benefit (CRB), the Canada Recovery Caregiving Benefit (CRCB) or the Canada Recovery Sickness Benefit (CRSB) beginning in May.

That's because the federal government generally pays benefits to people based on their previous year's tax filings, which allows the CRA to determine if the individual is eligible for them (such as the Canada Child Benefit).

The eligibility criteria for the CRM, CRCB and CRSB varies, but all three notably require the applicant to have earned at least $5,000 in 2019, 2020 or in the 12 months preceding the request.

So whereas an eligible applicant who has filed their taxes by the end of the month can expect money in their bank account within three to five business days, the CRA warns that those who don't can expect the agency to request more documentation before paying out.

That process can take up to eight weeks if the documentation is in order, but can logically also result in your application being flatout refused if you can't prove your eligibility.

“The CRA is committed to having validation and security measures in place, to ensure that we deliver benefit payments only to people who are entitled to receive them. Where eligibility is in question, a review will be conducted to ensure that recipients were only paid amounts they were entitled to,” agency spokesperson Sylvie Branch said in a statement. The significant delay for non-tax filers is new compared to the application process for the government's first COVID-19 aid program launched last spring, the $2,000 per month Canada Emergency Response Benefit.

At the time, CRA approved most applications from Canadians who hadn't filed their 2019 taxes because the program was launched months after the beginning of 2020. That meant that applicants could have made the minimum amount of money to be eligible during that period even if they didn't in 2019.

Back in November, the CRA revealed that 800,000 recipients of CRB'S predecessor, the Canada Emergency Response Benefit, had not filed taxes in the year leading up to the pandemic.

For the CRA, the 2020 tax season will also be critical in the monumental task it's facing to recoup any COVID-19 benefit overpayments to Canadians. Since those programs were designed to delivery money quickly when the pandemic struck, many of the usual prepayment verifications were cast aside at the time.

As of now, the agency doesn't quite know how many ineligible people or companies (via the Canada Emergency Wage Subsidy) received money it will have to claw back. But with crucial employment and revenue information now flowing in from likely millions of COVID-19 aid program recipients via their tax filings, the CRA says it will be in a better position to determine how much money it will have to recoup over the next years from ineligible or illegal claims.

Already, the auditor general revealed last month that the government had paid $500 million to CERB double-dippers that it now had to reclaim. That doesn't even include any fraudulent, erroneous or ineligible CERB claims.

“What we are trying to do in terms of controlling fraud, where we see cases where it looks like there's something suspicious, we do block accounts, and prevent the money from going out. So we are taking actions along the way, but we're really going to get a big swath of information in the coming weeks that will help us determine what happened,” CRA commissioner Bob Hamilton told a parliamentary committee Thursday.

THE CRA IS COMMITTED TO HAVING VALIDATION AND SECURITY MEASURES IN PLACE.