Canada Recovery Benefit (CRB) - All you need to know
The Canada Revenue Agency (CRA) has launched the new Canada Recovery Benefit (CRB) this week. The CRB is an alternative Canada Emergency Response Benefit (CERB) for those who don’t have an Employment Insurance (EI) or have exhausted their EI.
The CERB was the most popular and successful benefit of the CRA to date, and Canadians had difficulty parting ways with the benefit. Change is not easy, but it is still a necessity.
Adapting to a new way of living with COVID-19, people need more flexibility in terms of work without affecting their income. Many people would be jobless or may not be able to work because of COVID-19-related issues.
Anyone can contract coronavirus. At that time, the infected person has to be quarantined for 14 days. The area is declared a containment zone, and the local shops and businesses are closed. The new recovery benefits are designed to address these issues.
The Canada Recovery Benefit will provide $500 per week for up to 26 weeks to workers who are not eligible for EI.
This program is expected to provide coverage for the many self-employed and gig economy workers who do not meet the requirements to collect EI benefits and who remain affected by the economic fallout resulting from COVID-19.
A new Canada Recovery Caregiving Benefit program will also offer $500 per week to caregivers who must take care of children at home due to school or daycare closures.
And, lastly, a new Canada Recovery Sickness Benefit will provide up to a total of $1,000 to workers who are sick and do not have access to paid sick leave.
The CERB replacement and transition plan is expected to cost at least $37 billion over the next year.
WHAT IS THE CANADA RECOVERY BENEFIT?
The Canada Recovery Benefit is a CERB transition program that provides income support to workers who do not qualify for employment insurance.
The CRB launches on September 27, 2020, and will remain in place for one year.
As the CERB winds up, it is expected that millions of recipients will transition to collecting EI regular benefits. However, self-employed folks and gig workers who are ineligible for EI can apply for CRB benefits for up to 26 weeks if they meet the eligibility requirements.
Recipients of the CRB will get $500 per week for up to 26 weeks. The new CRB is expected to cost $22 billion.
WHO QUALIFIES FOR THE CRB BENEFIT?
The CRB has three different streams of benefits and each one has its qualifications criteria:
1. CANADA RECOVERY BENEFIT (CRB)
This benefit is available to workers who are unable to work because of COVID-19 or whose incomes are reduced compared to pre-pandemic levels.
Based on available infomation, you may qualify if you:
- re at least 15 years old and have a valid Social Insurance Number (SIN)
- Stopped working due to COVID-19 and are actively looking for employment
- Are working but your income is reduced due to COVID-19
- Are not eligible for employment insurance
- Had an income of at least $5,000 in 2019 or 2020, and
- Have not voluntarily quit your job
2. CANADA RECOVERY CAREGIVING BENEFIT (CRCB)
This benefit is availanble to caregivers who are unable to work becauss they have to care for children or other dependents due to COVID-19.
To be eligible, you must:
- Live in Canada and be at least 15 years old
- Have a valid SIN
- Be employed or self-employed just prior to applying for CRB
- Be unable to do at least 60% of your normal work because school, daycare, or a care facility is closed and you have to care for a child under 12 years of age or a family member with a disability
- Do not have access to paid leave for the weeks you are claiming
- You are not receiving the CRB, Canada Recovery Sickness Benefit, disability benefits, worker’s compensation benefits, or EI Emergency Recovery Benefits for the week you are claiming
3. CANADA RECOVERY SICKNESS BENEFIT (CRSB)
This benefit is available to workers who are unable to work due to sickness or self-isolation as a result of COVID-19.
HOW MUCH MONEY WILL I GET FROM THE CRB?
You will receive a benefit amount of $500 per week for up to 26 weeks or 6 months. This translates to $2,000 per month in Canada Recovery Benefits.
Eligible workers can receive a total benefit of $13,000 between September 27, 2020, and September 25, 2021 (1 year).
The amounts from the two other temporary benefit programs are as follows:
Canada Recovery Caregiving Benefit: You receive $500 per week (i.e. $2000 per month) for up to 26 weeks, for a potential total benefit amount of $13,000.
Canada Recovery Sickness Benefit: You receive $500 per week for up to two weeks, for a potential total benefit amount of $1,000.
The Canada Recovery Benefit is expected to commence on September 27, 2020, and be available for one year (12 months).
HOW TO APPLY FOR THE CRB BENEFIT
The Canada Recovery Benefits program will be managed by the Canada Revenue Agency (CRA). You will be able to appy online via CRA MyAccount when the program launches on September 27, 2020.
For the CRB, you will need to apply after every 2-week period and will be required to attest that you continue to meet the eligibility requirements.
In general, you must actively seek employment to remain eligible.
For the CRSB (sickness benefit), a medical certificate is not required to qualify for the benefit. You will need to have missed at least 60% of your weekly duties due to sickness from COVID-19 or self-isolation.
For the CRCB (caregiving benefits), you can apply after the period in which you meet the requirements. Only one member of a household can apply for the benefit in any period.
CAN I WORK WHILE RECEIVING CRB BENEFITS?
The government wants to encourage people to go back to work while also creating a cushion if work is not available due to the novel coronavirus pandemic.
You can work and earn an income while receiving the new Canada Recovery Benefit payments.
If you meet the eligibility requirements, you can continue to get the $2,000 per month CRB benefit and still earn up to $38,000 in employment or self-employment income.
After you cross the $38,000 threshold, CRB payments are clawed back at a rate of $0.50 for every dollar in income (i.e. a 50% clawback).
For example, if you earn $40,000 in employment income and have collected CRB, you will have to repay up to $2,000 back (calculated as $2000 in excess income x 50%).
The $500 CRB is better than the $500 CERB
The Justin Trudeau government has passed new legislation in which it increased the CRB benefit to $500 a week, bringing it in line with the CERB. The government realized that it would at least take a year for the economy to return to normalcy. Hence, the new CRB begins from September 27 and ends on September 25, 2021. Every eligible individual can claim the CRB for up to 26 weeks, claiming a maximum of $13,000.
The CRB is just like the CERB. It is better than the CERB in two ways.
You can claim the CRB even if your monthly income for the benefit period exceeds $1,000. The only condition is your annual income should not exceed $38,000 after excluding CRB.
You can claim CRB till September 25, 2021. In these 52 weeks, you can claim the benefit for any of the 26 weeks when you become eligible.
IS THE CRB TAXABLE?
All benefits received under the three Canada Recovery Benefit programs are considered to be taxable income.
Come tax season in April 2021, a tax information slip will be available in your CRA MyAccount.
CRB VS EI
CERB is transitioning to a simplified Employment Insurance (EI) program starting on September 27, 2020, and eliigible CERB claimants will start receiving EI through Service Canada.
CRB is a temporary program designed to cater to workers who are ineligible for EI regular and EI special benefits.
This includes self-employed and gig economy workers who are unable to return to work.
EMPLOYMENT INSURANCE (EI) CHANGES
The EI program is being overhauled and simplified to allow more workers to claim benefits. It will be administered by Service Canada and offer the following benefits:
EI REGULAR BENEFITS AND EI SPECIAL BENEFITS
Eligible recipients will get a minimum EI benefit of $400 per week for at least 26 weeks. EI claimants for extended parental benefits will receive at least $240 per week.
Changes were made to EI eligibility requiements in order to accommodate workers who have been unable to work a normal schedule due to COVID-19.
These EI changes include:
The minimum hours to qualify for EI is now 120 hours of work (approx. 3.5 weeks). This is in comparison to the 420 to 700 hours usually required.
To meet the minimum hours required, EI claimants get a 300 hours credit for regular benefits and 480 hours credit for special benefits e.g. sickness, maternity, or compassionate caregiver benefits. These insurable credit hours are available for EI claims made within the next one year.
The minimum weekly EI benefit is $400 per week. This is different from the traditional 55% of average weekly earnings up to $573 maximum that is normally paid out. The new program puts a bottom to the weekly benefits at $400.
EI PREMIUM RATE FREEZE
EI premium rates for employers and employees will stay frozen at the 2020 level for two years. What this means is that there won’t be an increase to EI premiums and employees will continue paying $1.58 per
$100 of insurable earnings.
Also, the employer rate will remain at $2.21 per $100 of insurable earnings.
Once Again. How to apply for CRB?
The CRA has changed the application process for the CRB to improve the glitches the CERB application had. In CERB, you could apply for four weeks in advance, anticipating that you won’t earn more than $1,000 for that period. This led to many applicants repaying their CERB later. Moreover, the CRA is also giving retroactive CERB payments for those who apply for the previous period before December 2. All this is adding to CRA’s administrative burden.
The CRA has made the CRB smoother. You have to first register for the benefit on the CRA website. Then, you can submit your application every two weeks. In one application, you can’t claim for more than two weeks. Moreover, you can’t claim the benefit after 60 days of the benefit period.
For instance, you can claim the first CRB on October 12 for the two weeks from September 27 to October 11. If you are eligible for the benefit during this period, your last date to apply would be December 10 (60 days after the end of the benefit period).
