Decoding the financial-aid puzzle
Many are left confused by the difference between EI and CERB
As financial relief begins to arrive in the bank accounts of the thousands of Canadians suddenly left unemployed during the COVID-19 pandemic, many are finding the process puzzling.
If you, too, are wondering where that money in your account came from and whether you’ll have to return it, you’re not alone.
Many recipients are confused by the difference between Employment Insurance (EI), which a worker typically gets when laid-off, and the new Canada Emergency Response Benefit (CERB), which provides $2,000 per month for four months. The phone lines to Service Canada and the Canada Revenue Agency are busy as thousands of Canadians call for answers every day.
To help out, the Star is gathering your questions about EI and CERB and attempting to answer your concerns. If you don’t see your question below, send it in and we’ll try to get the answer.
Is CERB taxable income? What about EI?
CERB is taxable income, which you’ll have to declare come the 2021 tax season. How much you’re taxed will depend on your tax bracket for the year.
EI is also taxable, but it’s taxed at the source, meaning you won’t have to pay any extra taxes on it in 2021. While many Canadians who applied for EI are getting CERB instead, those who applied before March 15 will be receiving EI.
Is it true the CRA is approving everyone for CERB right away, and then asking people to pay it back later if they don’t qualify?
CERB is an emergency benefit, meaning it’s paid out without a full application process — this means people can get their funds within days, instead of waiting out the backlog of EI applications the government had before CERB.
However, this means that if you don’t qualify for CERB, you will have to repay what you received at a later date. In an email, a CRA spokesperson compared it to Canada’s income-tax season, where your taxes are checked at a later date.
How will I know if I need to repay what I’ve received?
There are two reasons you might need to repay CERB money.
Some people applied for both EI and CERB, and are receiving double payments. Others applied for one, but don’t actually qualify for CERB.
If this is the case, the CRA will let you know, said a spokesperson.
“If any payments are found to have been made in error or a taxpayer is deemed ineligible, the taxpayer will be informed and required to repay the amount owing.”
How or when do I reapply for the CERB?
According to the CRA, each application for CERB covers a four-week period. After those four weeks, the applicant can reapply, for a maximum of 16 weeks, or four periods. If applying through the CRA, you must make a new application for every period.
The first four-week period runs from March 15 to April 11, and a full list of the periods can be found at Canada.ca.
Will receiving CERB affect my eligibility for EI after the four periods end?
According to the federal government website, receiving CERB will not affect your EI entitlement.
How do I know if the payments I’m getting are CERB or EI? What do I do if I’m getting both?
If you applied for EI before March 15 and are eligible, you will get EI payments. If you applied for EI or sickness benefits on March 15 or afterward, you will automatically be switched over to CERB.
If you applied for both EI and CERB after March 15, you may get double CERB payments and will have to pay half of it back — the CRA has said it will notify people in this position.
What should I do if my EI application from after March 15 is still processing, and doesn’t seem to have been switched to CERB?
According to a CRA spokesperson, your application will still automatically be switched to CERB, and Service Canada is processing these as quickly as possible.