The COVID-19 Response Measures Act (formerly Bill C-4) received royal assent on October 2, 2020. This legislation created three new temporary recovery benefits to support Canadians who are unable to work for reasons related to COVID-19. These benefits are in place for one year beginning September 27, 2020 (retroactive date), and ending September 25, 2021. Canadians were able to apply through the Canada Revenue Agency (CRA) for two of the benefits starting on October 5, 2020, and for the third starting on October 12, 2020. Service Canada and the CRA work collaboratively on integrity measures for the new recovery benefits. The recovery benefits are paid in arrears, with workers applying after the period for which they were unable to work. The recovery benefits are taxable, with tax withheld at source.
A Canada Recovery Caregiving Benefit (CRCB) of $500 per week for up to 26 weeks per household is available for workers who are unable to work for at least 50 percent of the week because they must care for a child under the age of 12 or a family member because schools, day-cares or care facilities are closed due to COVID-19, or because the child or family member is sick and/or required to quarantine or is at high risk of serious health implications because of COVID-19.
This benefit would be used by employees if they are taking a leave of absence from work to care for a child or family member due to COVID-19. This includes when an employee needs to care for a family member who has contracted COVID-19 or who has a low immune system and the employee cannot go to work while living in the same residence as that person and cannot work from home; or when schools, day cares or care facilities are closed due to COVID-19. When the employee is quarantined, use Code D (illness or injury) in block 16 of the ROE because there is no code for quarantine. Do not add comments. You can also use Code N (leave of absence).
More on the CRCB can be read here.
A Canada Recovery Sickness Benefit (CRSB) of $500 per week for up to a maximum of two weeks is available for workers who are unable to work for at least 50 percent of the week because they contracted COVID-19, self-isolated for reasons related to COVID-19, or have underlying conditions, are undergoing treatments or have contracted other sicknesses that, in the opinion of a medical practitioner, nurse practitioner, person in authority, government or public health authority, would make them more susceptible to COVID-19.
This benefit would be used by employees if they are required to isolate while they are waiting for testing, for the required 14-day isolation period or to recover from having contracted COVID-19. An ROE would need to be issued. When the employee is sick or quarantined, use code D (illness or injury) in block 16. Do not add comments.
More on the CRSB can be read here.
Effective October 12, the CRA opened applications for the Canada Recovery Benefit (CRB), which provides $500 per week for up to 26 weeks for eligible workers who have stopped working and who are not eligible for EI, or who have had their employment/self-employment income reduced by at least 50 percent due to COVID-19. This benefit is paid in two-week periods.
To support the delivery of these new recovery benefits, the CRA provides a simple and efficient attestation-based application process similar to the one that millions of Canadians relied on to access CERB payments. Eligible individuals are able to apply for recovery benefits online through the CRA’s My Account portal or by phone through the CRA’s automated phone line.
The federal government has stated that it is committed to having safeguards in place to protect Canadians from fraud and to keep the system secure. To this end, the CRA is taking steps to implement additional verification and security measures up-front to help ensure that it delivers benefit payments only to individuals who are entitled to receive them. In some cases, individuals will be asked to provide additional information so that their eligibility can be verified before their application is processed.
Regarding the CRB, people may earn income of up to $38,000 for the calendar year while receiving the CRB. People will have to reimburse $0.50 of the CRB for every dollar of net income earned above $38,000, up to the maximum benefit they received. This will be calculated and repaid as part of their income tax return filing when they do their taxes for the year. Applicants must also be searching for work, either as an employee or in self-employment, and must not have turned down any reasonable opportunity in the two-week period they are 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,” the government said.
More information on how Canadians can get ready to apply can be found on the new Canada Recovery Benefits web page here.
Other information applicable to all three recovery benefits
Regarding all three benefits outlined above, people cannot apply for or receive, for the same period, more than one recovery benefit, Employment Insurance (EI) benefits, workers’ compensation benefits or Québec Parental Insurance Plan benefits.
The application process includes new elements:
- Shorter eligibility periods of one week for the CRSB and CRCB, and two weeks for the CRB. The CRCB and the CRSB benefits are paid on a weekly basis, meaning Canadians will have to reapply each week they are eligible.
- Retroactive periods, meaning that people will be required to apply after the period has ended.
- A 10 percent tax withholding at source.
- A three-to-five-day window to receive payments for applications made by direct deposit, and a 10-to-12-day window by cheque by mail.
What happened to the CERB?
The enactment of An Act relating to certain measures in response to COVID-19 officially ended the Canada Emergency Response Benefit (CERB) effective September 26, 2020. However, on October 19, 2020, the CRA announced that they are continuing to accept and process retroactive applications until December 2, 2020. Individuals can apply for Periods 5 to 7 through the CRA’s My Account or automated toll-free phone line at 1-800-959-2019 or 1-800-959-2041. Individuals can apply for Periods 1 to 4 by speaking to one of the CRA agents at 1-800-232-1966. Please note that individuals may be required to provide additional documentation to the CRA prior to their application being approved. The CRA is validating applications in order to maintain public confidence in Canada’s tax system and ensure that payments are available for people who need them most.
The CRA may need some more information before processing an application, if they need to validate the application or if the individual receives a notice asking the individual to validate his or her application. The documents that may be needed include:
- Recent pay slips
- Employer name and address
- Record of Employment
- Statement of benefits
- Invoice for services rendered
- Receipt of payment for the service(s) provided
- Other readily available and relevant information
- Reviewing eligibility