As 2020 draws closer to an end (feel that fall chill?), that also means the end of CERB—Canada’s Emergency Response Benefit that has aided over eight million Canadians financially amid the coronavirus pandemic—is near.
The $2,000-per-month benefit launched in April and offers financial support Canadians (including the self-employed) whose jobs were directly affected by COVID-19.
In July, Prime Minister Justin Trudeau said the federal government would replace the benefit with Employment Insurance (EI), adding that an alternative for part-time workers and self-employed individuals who are not covered by EI would be coming as well. On August 20, newly appointed Finance Minister Chrystia Freeland and minister of employment, workforce development and disability inclusion, Carla Qualtrough, announced they would be extending CERB and confirmed that $37-billion will be spent on new and revamped federal income support programs for workers affected by the coronavirus pandemic.
Here’s everything we know so far about the end of CERB and the proposed CERB alternative.
When does CERB end?
On August 20, the federal government announced it would be extending CERB by one more month until September 27, and Canadians would be able to re-apply up to a maximum of seven periods instead of six.
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What is the CERB alternative?
There are a few alternatives for CERB: A “simplified” EI program and three new benefit programs for workers who do not qualify for EI. This is part of Trudeau’s previous promise that no Canadian would be “left behind” during the transition away from CERB. Canadians who were already eligible for EI will transition to that program when CERB winds down, while those who don’t qualify can apply for the new “recovery” benefits. On October 2, the COVID-19 Response Measures Act (formerly Bill C-4) officially received Royal Assent (A.K.A it passed and is officially an Act of Parliament).
OK, so what are these new benefit programs?
The first program is the “Canada Recovery Sickness Benefit” (CRSB), which offers paid sick leave to any worker in Canada who falls ill or has to self-isolate due to COVID-19 and is unable to work for at least 50% of the week. Starting October 5, this benefit provides $500 per week for up to two weeks and is meant for those who don’t already have paid sick leave through their employer.
The second program, called the “Canada Recovery Caregiving Benefit” (CRCB) is meant to provide help for those who are unable to work for at least 50% of the work week because they need to stay home to care for a loved one such as a child under the age of 12 or other dependent, due to the closure of schools, daycares, or other care facilities. In addition, Canadians may apply for this benefit if they must stay home because a child or family member is sick and/or required to quarantine or is at a high risk of serious health implications due to COVID-19. This program offers $500 a week for up to 26 weeks per household, with just one adult per household able to claim the program at a time. However, this benefit can only be used when facilities are closed, not just because someone would prefer to keep their loved one at home.
Canadians are able to apply for the CRSB and CRCB benefits, through the CRA website, starting October 5 and need to reapply each week they are eligible.
The third program is called the “Canada Recovery Benefit” and is meant for those who have stopped working and who are ineligible for EI, or who’ve had their employment or self-employment income reduced by at least 50% due to COVID-19. Under this new program—which starts October 12—Canadians can apply for a benefit of $500 a week for up to 26 weeks if they have stopped working or had reduced income during COVID-19. This benefit—which will be paid in two-week periods—will still allow them to earn money, but they will be required to repay 50 cents of every dollar earned above $38,000. Additionally, in order to qualify, you need to continue looking for work if you have not yet gotten another job.
These three benefits are taxable, meaning tax will be deducted from the payments from these three benefits.
And what’s happening with EI?
The criteria for EI is opening up so that Canadians with 120 insurable hours across Canada can apply and receive a minimum payment of $400 per week, and a maximum of $573 per week, depending on past earnings. This reworked EI can be claimed for 26 to 45 weeks, depending on the time worked prior.
Those claiming EI can still earn income, but will have their benefits adjusted to a reduction of 50 cents for each dollar of earnings. The government is also freezing the EI premium rate for two years, as it would typically be set to increase, raising costs for workers and employers.
How do I know which benefit I’m eligible for?
EI, like the name suggests, is like insurance—you only receive benefits when you pay the premium for a minimum period. If you have worked with employers who deducted an EI premium for their salaries, you are eligible. In order to qualify, you must be completely out of work with no wage income.
If you are a part-time worker, a parent who had to stop working due to lack of childcare, a self-employed or freelance worker, or an individual who doesn’t have enough employment hours to qualify for EI, chances are you would fall under one of the new benefit programs.
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How do I apply for the new CERB alternatives?
A new website that launched in mid-September gives you access to these new benefits when their application windows open. Applications for the new recovery benefits are scheduled to open in October, with payments flowing in three to five days later.
How long will these new EI changes and three new benefits be in place?
According to an October 2 news release from the Government of Canada, these benefits will be in place for a year beginning September 27, 2020. They are expected to cost taxpayers $8 billion for the one-month extension of CERB, $7 billion for the planned modifications to the EI program, and $22 billion for the new benefit programs.