The coronavirus (COVID-19) pandemic has affected employment and income for many globally. In Canada, the government implemented many benefits such as the Canada Emergency Response Benefit (CERB) and also outlined an Economic Response Plan to help individuals and businesses facing hardship.
After the CERB ended on September 26, 2020, the government introduced several new benefits to assist workers who are still impacted by the pandemic. The Canadian Recovery Benefit (CRB) is a new benefit that provides financial relief for individuals who don’t qualify for an updated Employment Insurance (EI) program or one of the two accompanying benefits: Canada Recovery Sickness Benefit (CRSB) and Canada Recovery Caregiving Benefit (CRCB).
|Canada Recovery Sickness Benefit (CRSB):
Available to individuals who are unable to work due to sickness or self-isolation as a result of COVID-19.
Canada Recovery Caregiving Benefit (CRCB):
Applications for the CRSB and CRCB opened on October 5, 2020.
In this article, we will explain CRB in detail and dive into the specifics such as application timelines, eligibility criteria, and application process.
Transitioning from CERB to EI
With the end of CERB, eligible individuals will be transitioned to EI or CRB. The EI program is being overhauled and simplified to allow more workers to claim benefits. Those who collected CERB through Service Canada and are eligible for EI were automatically transferred to the new program after it ended on September 26, 2020. However, those who received CERB through the CRA will have to apply for EI, which is administered through Service Canada.
Summary of changes made to the EI program
- The minimum hours to qualify for EI is now 120 hours of work. Previously, 420 to 700 hours of work was required for regular benefits, and 600 hours for special benefits, depending on the region.
- To meet the minimum hours required, the government has introduced a one-time credit system. For those applying for regular benefits, a credit of 300 hours will be applied, while for special benefits, a credit of 480 hours can be claimed retroactively starting from March 15. These credit hours are available for EI claims made within the next year.
- The new EI program will let individuals transitioning onto it from the CERB receive $500 CAD per week (to match the CRB and former CERB).
- The minimum weekly EI benefit is $500 CAD per week (to match the CRB and former CERB) but you could receive more. Previously, 55 per cent of average weekly earnings (up to a maximum of $573 CAD) was paid out.
For employment-related benefits, if you don’t qualify for EI, you can look into applying for the CRB.
What is the Canada Recovery Benefit (CRB)?
As outlined by the government of Canada, the CRB provides 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 CAD ($900 CAD, after ten per cent taxes withheld) for a two-week period. The CRB does not renew automatically. If your situation continues past two weeks, you will need to re-apply. You may apply up to a total of 13 eligibility periods (26 weeks) between September 27, 2020, and September 25, 2021. The 13 periods do not have to be taken consecutively.
Tip: To confirm the number of periods you have already received the CRB, you can review your application history in CRA My Account, under “COVID-19 Support Payment Application Details”.
Is the CRB taxable?
Yes, the amounts received through the CRB are taxable as they must be included in income for the year when recipients file their tax returns. The 10 per cent tax withheld at the source may not be all the tax you need to pay. When you complete your personal income tax return, you may need to pay more (or less), depending on how much income you earned during the year. You must report the CRB payments you receive as income when you file your personal income tax return. The CRA will provide you with a T4A tax information slip at tax time for the amount you received in CRA-administered COVID-19 benefits.
For many newcomers filing your taxes for the first time can be a little daunting and confusing. It’s important you understand how taxes work, how taxes impact life in Canada, the importance of paying your taxes on time every year to avoid penalties, and how to maximize your tax refund.
Download the free guide to filing income taxes as a newcomer to Canada and be prepared to manage the expectations that come with paying taxes.
When can you apply for the CRB?
The application process for CRB opens on October 12, 2020.
If you meet all the eligibility criteria for the entire two-week period, the earliest you can apply is the first Monday after the two-week period has ended. When the applications open on October 12, you will be able to apply for the first eligibility period: September 27, 2020, to October 10, 2020. You may also apply for benefits retroactively for any period up to 60 days after that period has ended.
Who can apply for the CRB?
To be eligible for the CRB, you must meet all the following conditions for the two-week period you are applying for:
- You were unemployed due to COVID-19 OR you had a 50 per cent reduction in your average weekly income compared to the previous year due to COVID-19.
- You did not apply for or receive any of the following:
- You were not eligible for EI benefits.
- You reside in Canada (note: You do not have to be a citizen or a permanent resident).
- You were present in Canada.
- You are at least 15 years old.
- You have a valid Social Insurance Number (SIN).
- You earned at least $5,000 CAD (before deductions) in 2019, 2020, or in the 12 months before the date you apply from either employment income, self-employment income, or maternity and parental benefits from EI or similar QPIP benefits.
- You have not quit your job or reduced your hours voluntarily on or after September 27, 2020.
- You were seeking work during the period, either as an employee or in self-employment.
- Provincial course exception: If you attended a course, program, or training referred to you by a provincial government or provincial body during the two-week period, you may be eligible for the CRB if you also meet all the other eligibility criteria.
- Working while receiving CRB: You may earn employment or self-employment income while you receive the CRB. But to make sure the benefit reaches those who need it most, the CRB has an income threshold of $38,000 CAD. This amount excludes CRB payments. You will have to reimburse $0.50 CAD for every dollar of net income you earn above $38,000 CAD on your income tax return for that year (2020 or 2021). You will not have to pay back more than your benefit amount for that year.
- You have not turned down reasonable work during the two-week period you’re applying for. If you refuse reasonable work, you will automatically lose five periods (10 weeks) of the CRB eligibility periods. You must also wait five periods (10 weeks) before you can re-apply. If you refuse work again, you will face the penalty again.
If information is missing from your application, you may need to provide additional documentation to validate your application and complete the process, which may take up to four weeks from the time the CRA receives your documentation.
Tip: If you’re not eligible for CRB but still need financial support, you can review other options at COVID-19 benefits and services.
How to apply for CRB
There are three steps to apply for CRB:
Step 1: Confirm if you are currently registered with the CRA
The easiest way is to apply online through CRA My Account. If you don’t have a CRA My Account yet, it is highly recommended to register for one right away, so you’ll be ready to apply online when applications open.
Tip: Anyone applying for the CRB benefit is encouraged to complete their 2019 tax return to reduce the chances that their application will be flagged and delayed.
Step 2: Set up payment options
Direct deposit payments take about three to five business days. You can even opt for a cheque. A cheque takes about 10 to 12 business days.
Direct Deposit – A fast and secure way to receive money from the CRA
Applying for financial relief through the CRB? To access your money faster, sign up for direct deposit from the CRA. If you have an RBC bank account, setting up a CRA Direct Deposit is easy – simply register through RBC Online Banking or the RBC Mobile app.
Book an appointment with an RBC Advisor to learn more about opening an RBC newcomer bank account.
Step 3: Check impact on your social assistance benefits
If you receive any provincial or territorial Social (income or disability) assistance, you may want to consult your Provincial or Territorial Social Assistance Office before applying for the CRB to make sure that your other benefits won’t be affected.
How to return a CRB payment back to the CRA
You may want to return a payment to the CRA if your situation has changed since you first applied or if you made a mistake while applying and are no longer eligible. You should return any payments you received in 2020 that you’re not eligible for before December 31, 2020.
To repay CRB, you can choose between:
- Online transfer through your financial institution, OR
- Mailing a cheque or money order to the CRA.
Tip: Beware of fraudulent emails, texts, or calls claiming to be from the CRA about repaying the CRB or requesting personal information. For more details, read our article on Common scams that newcomers to Canada should know about.
Depending on your personal and professional situation, you should choose the government benefit that’s best suited for you. The CRA will verify that you’re eligible to receive the benefits. There are measures in place to identify individuals who intentionally make fraudulent claims. Such individuals may face additional consequences, such as penalties or possible jail time. It is therefore recommended to assess your situation based on government guidelines and submit an honest application to claim benefits.
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