Support for Individuals Noted From The Federal Government:
** Disclaimer: Note we are just relaying information from the government – this information is up to date as of today’s date but can be subject to change based on their daily announcements **
New Canada Emergency Response Benefit
The new Canada Emergency Response Benefit (CERB) will provide a taxable amount of $2,000 per month for up to four months
Eligibility Summary:
- Workers who must stop working due to COVID-19 and do not have access to paid leave or other income support;
- Workers who are sick, quarantined, or taking care of someone who is sick with COVID-19;
- Working parents who must stay home without pay to care for children that are sick or need additional care because of school and/or daycare closure;
- Workers who still have their employment but are not being paid because there is currently not sufficient work and their employer has asked them not to come to work; or
- Wage earners and self-employed individuals, including contract workers, who would not otherwise be eligible for Employment Insurance.
Individuals who apply for this benefit will not be entitled to EI and vice versa.
The Canada Emergency Response Benefit will be accessible through a secure web portal starting in early April. Applicants will also be able to apply via an automated telephone line or via a toll-free number.
Q&A
Q: When does the Canada Emergency Response Benefit start?
A: The Canada Emergency Response Benefit will be in place, retroactively from March 15, 2020, until October 3, 2020. No worker is permitted to file an application after December 2, 2020.
Note, however, the program does not start until April 6. Thus, CERB Payments will not be made until some time shortly after April 6, 2020.
Q: How long is the Canada Emergency Response Benefit?
A: This Canada Emergency Response Benefit would provide income replacement for up to four months for workers who lose their income as a result of the COVID-19 pandemic.
Q: How soon can the Canada Emergency Response Benefit be paid?
A: Canadian residents can expect to receive their CERB payments within 10 days of application beginning after April 6, 2020. There is no one-week waiting period “deductible” like regular Employment Insurance (“EI”).
However, Canadian residents are only entitled to the CERB 14 days after their employer stopped paying them. Accordingly, for example, if an employer stops paying an employee on April 1, then the employee would only begin to receive CERB payments after April 14, 2020.
Q: How much is the Canada Emergency Response Benefit?
A: The Canada Emergency Response Benefit will provide $2,000 a month for up to four months for workers who lose their income as a result of the COVID-19 pandemic.
It does not appear there is any calculation for the payment in terms of how much money someone normally makes. To that effect, it appears all workers who are approved will receive $2,000 per month. Note this still has to be confirmed.
This CERB amount ($2,000) appears to be actually less pay than regular EI for workers who earned over $54,200 per year. This means that instead of receiving $573 maximum per week on EI, workers on this program would only receive $500 per week. However, it does appear that EI eligibility months will not be deducted while on the CERB. Therefore, once the 4-month CERB is up for a worker, if they are still eligible, they can receive their full number of months of EI at the $573 rate.
The CERB is taxable income. The CERB is not a loan.
Q: Can an employee work and earn income while on the CERB?
A: Yes. In short, here is how workers could get the CERB and employer income in the same month: As a routine part of the CERB program, a worker on the CERB will need to make an online declaration every four weeks about whether they are still not working nor receiving income.
A worker will then be eligible for another CERB payment where they can show that they did not work 14 days and did not receive pay for 14 days in the last four weeks.
Accordingly, once the 14-days no work, no pay requirements have been met within a four-week period, workers may work and earn income on the remaining days within the four-week period and still receive the CERB.
Hypothetically, a worker could split up work with their employer like this:
Worker not working 14 days in a row in the month because of COVID-19 business slowdowns; Worker then works 10 days after that 14-day break and gets employer pay for these 10 workdays.
However, the requirement that the employee does not work 14 days because of COVID-19 business disruptions would still need to be met. The employee’s 14-day break from work and pay must be connected to COVID-19.
Q: What about the previously announced Emergency Care Benefit and Emergency Support Benefit?
A: The previously announced Emergency Care Benefit and Emergency Support Benefit is scrapped. The CERB replaces the previously announced Emergency Care Benefit and Emergency Support Benefit.
Q: How will the CERB be paid?
A: The CERB will be paid every four weeks by direct deposit or by cheque delivered by mail. Workers are encouraged to get their direct deposit information ready.
Workers will have to log in to the online CERB portal using their My Service Canada Account or My CRA Account monthly and declare they are still eligible for the CERB before every monthly CERB payment is made.
Q: When are applications for the Canada Emergency Response Benefit available?
A: The application for the Canada Emergency Response Benefit should be available on April 6, 2020 based on the Prime Minister’s announcement on March 23, 2020.
Q: Do self-employed people get the Canada Emergency Response Benefit?
A: Yes, unlike EI regular benefits, self-employed people are entitled to the Canada Emergency Response Benefit.
Q: What about people who are still employed?
A: The CERB covers Canadian residents who have (1) stopped working and (2) lost their income in at least 14 days in a month because of COVID-19.
Therefore, workers who are still employed but are not working or receiving pay because of disruptions to their work situation due to COVID-19 will qualify for the CERB.
Likewise, workers who stop working and stop receiving pay because of COVID-19 for only 14 days every month would still be eligible for the CERB.
On the contrary, workers who are sent home with pay would not receive the CERB.
Q: What about people already receiving EI?
A: Canadians who are already receiving Regular or sickness benefits on EI as of April 6, 2020, would continue to receive their benefits and should not apply to receive the Canada Emergency Response Benefit. If their EI benefits end, however, they could then apply for the Canada Emergency Response Benefit.
To be clear, an individual cannot receive EI and the CERB at the same time.
Q: What about workers who have applied for EI already but have not received a response?
A: Canadians who have already applied for EI and whose application has not yet been processed would not need to reapply for the Canada Emergency Response Benefit – their application will be rolled over.
Note that Canadians who are eligible for EI regular benefits, EI sickness benefits, EI maternity benefits and EI parental benefits will still be able to receive their normal EI benefits, if still unemployed, after the four-month period covered by the CERB.
Q: What happens when the Canada Emergency Response Benefit runs out?
A: After four months of the Canada Emergency Response Benefit, CERB payments will stop, but eligible individuals will be switched-over to standard Employment Insurance if they are still out of work.
OTHER FINANCIAL ASSISTANCE AVAILABLE FEDERALLY:
Increasing the Canada Child Benefit
The Government is providing an extra $300 per child through the Canada Child Benefit (CCB) for 2019-2020. This will mean approximately $550 more for the average family.
This benefit will be delivered as part of the scheduled CCB payment in May.
Those who already receive the Canada Child Benefit do not need to re-apply.
Special Goods and Services Tax Credit Payment
The Government is providing a one-time special payment by early May through the Goods and Services Tax credit for low- and modest-income families.
The average additional benefit will be close to $400 for single individuals and close to $600 for couples.
There is no need to apply for this payment. If you are eligible, you will get it automatically.
Extra Time To File Your Tax Returns
The Government is deferring the filing due date for the 2019 tax returns of individuals.
For individuals (other than trusts), the return filing due date will be deferred until June 1, 2020.
We will also allow any new income tax balances due, or instalments, to be deferred until after August 31, 2020 without incurring interest or penalties.
https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update.html
Mortgage Support
Canadian banks have committed to work with their customers on a case-by-case basis to find solutions to help them manage hardships caused by COVID-19. Canadians who are impacted by COVID-19 and experiencing financial hardship as a result should contact their financial institution regarding flexibility for a mortgage deferral. This allows flexibility to be available − when needed − to those who need it the most.
https://cba.ca/mortgage-deferral-to-help-canadians-experiencing-financial-hardship-due-to-covid-19
A mortgage deferral allows you to skip payments for a defined period of time. Interest will continue to be charged on the amount you owe and will be added to your balance.
When the deferral period ends, you’ll have to pay your deferred payments and added interest into your monthly payments. This could be either when your payments resume at the end of your deferral or upon renewal at the end of your mortgage’s term. If you have emergency savings, you may want to consider using them before considering a mortgage deferral.
Note that mortgage payment deferrals focus solely on your mortgage. It won’t affect other payments regularly withdrawn, like property taxes.
How to Apply For a Mortgage Deferral
Visit your bank’s website for the latest information on mortgage deferrals.
Note that COVID-19-related mortgage deferral is available for an indefinite period. This means that you do not face a deadline for having to seek relief. You can approach your bank as the need arises.
If your mortgage is insured with the CMHC, you can contact a mortgage professional for assistance. They can determine what options you have and help you find a solution for your specific situation.
Avoiding More Debt
During this uncertain period, try to avoid borrowing additional money as much as possible. Research shows those who often use credit to pay for daily expenses because they have run short of money have lower levels of financial well-being.
If you must borrow money, make sure you understand the cost of different credit products before you make a decision, and borrow only what you need.
Certain credit products are more expensive than others due to their high interest rates and fees. For example, a payday loan should be your absolute last resort, as they often carry very high fees.
A home equity line of credit (HELOC), on the other hand, could potentially be a good replacement for emergency savings, under certain circumstances.
Make sure you compare all borrowing options and their fees, interest rates and repayment terms before choosing a credit product. Otherwise, contracting new expensive credit now could create more financial problems for you in the future.
https://www.canada.ca/en/financial-consumer-agency/services/loans/consider-borrow.html
Contacting Your Financial Institution for Further Mortgage Assistance
The Canada Mortgage and Housing Corporation and other mortgage insurers offer tools to lenders that can assist homeowners who may be experiencing financial difficulty. These include payment deferral, loan re-amortization, capitalization of outstanding interest arrears and other eligible expenses, and special payment arrangements.
Canada’s mortgage insurers are committed to providing homeowners with solutions to mitigate temporary financial hardship related to COVID-19. This includes permitting lenders to defer up to six monthly mortgage payments (interest and principal) for impacted borrowers. Deferred payments are added to the outstanding principal balance and subsequently repaid throughout the life of the mortgage.
Again, we are just relaying information from the government of Canada so you are up to date on all the information you receive.
Thank you,
Sandra Morrison, CPM, CPHR, SHRM-SCP
Vice President, Human Resources | smorrison
