Canada Emergency Wage Subsidy vs. Canada Emergency Response Benefit: “It’s one or the other” says Prime Minister Justin Trudeau

Be prepared to repay CERB payments if you get rehired through the Canada Emergency Wage Subsidy Program

Prime Minister Justin Trudeau warns Canadians who are receiving the Canada Emergency Response Benefit (CERB) that they may have to repay the government if they get rehired through the Canada Emergency Wage Subsidy program.

“You won’t be able to keep both the wage subsidy and the Canada Emergency Response Benefit. It’s one or the other, not both,” warned Prime Minister Justin Trudeau in his daily announcements on Monday morning.

The CERB program was one of the first financial aid benefit programs that the federal government had announced amid the COVID-19 crisis that has shut-down the country for the past couple of weeks.

Through the benefit, eligible Canadians would receive payments of up to $2,000 a month for four months. The CERB was designed to support Canadians as non-essential businesses were pressured to close amid the pandemic, leaving many Canadians facing either unemployed or a significant reduction in pay.

Earlier this week, the federal government had also implemented the Canada Emergency Wage Subsidy program (CEWS), which have started to accept applications as of Monday April 27, 2020.

The CEWS, which is more complicated than the CERB, grants eligible businesses a 75% wage subsidy. In other words, the government will support businesses by covering 75% of employee wages for businesses that saw a dramatic decline in revenue due to the COVID-19 pandemic.

Through the subsidy, the federal government will be paying up to a maximum of $847 per week per worker for up to 12 weeks, starting on March 15 and ending June 6, 2020.

When should you stop collecting CERB?

As the Prime Minister has reiterated, Canadians needs to be aware that they can only receive one of the two benefits, either the CERB or the CEWS.

Here are some of the cases in which you should consider to stop collecting CERB payments and think about repaying the benefit in the future:

  1. If you have returned to work and are now earning a paycheque from an employer

The CERB was implemented by the federal government to support Canadians who are unemployed after March 15 as a result of the COVID-19 pandemic.

Additionally, the benefit was put in place to financially support:

  • Self-employed individuals who are no longer earning and income
  • Parents who have had to take time off work to take care of out-of-school children, those who are ill with the coronavirus, and or taking care of a loved one who is sick

If you are no longer fall in these categories, you may need to reconsider collecting CERB payments as you may need to repay the payments to the Canada Revenue Agency (CRA).

  1. If you were unemployed and have gotten rehired through the CEWS

Through the announced CEWS, many Canadians may be rehired in the coming days as businesses continue to apply for the 75% wage subsidy program.

If this is the case, where you have been rehired because your workplace is taking advantage of the CEWS benefit, you will have to stop accepting CERB payments.

It is important to note that you will not be directly receiving the CEWS cheques from the government, which was the case with CERB payments.

You will be receiving cheques from your employer, as your workplace applies to the government to get reimbursed for your salary through the CEWS benefit.

  1. If you have applied for the CERB twice, one through Canada Revenue Agency and another through Service Canada

There has been confusion regarding how Canadians can apply for the CERB amid the ongoing pandemic. Many Canadians may have inadvertently signed up for the CERB twice, once on both the CRA and Service Canada websites, and thus received two payments per month.

If this is the case, where you are receiving two CERB payments per month due to signing up for the benefit on both websites, you will have to repay one of the CERB payments you received.

How can you stop your CERB Payments?

To stop receiving payments from CERB it is as easy as choosing not to reapply for the CERB benefit for the next month.

Keep in mind that as your situation changes due to the COVID-19 pandemic, you are entitled to receive CERB payments once again if you are eligible for the benefit.

How do you repay the CERB?

If you find that you do need to repay the CERB, the Government of Canada’s website (linked here) outlines what steps to take to repay the government.

In short, you may either return the uncased cheque payment, write a new cheque for the amount owing to the CRA, or repay the amount through your MyCRA account.

The CRA is asking for Canadians to return any money owed before December 31, 2020.

In the closing statements of his address, Prime Minister Justin Trudeau made it clear that workers cannot receive funding from both the CERB and the CEWS at the same time.

“It is one or the other,” said the Prime Minister. While it’s possible some Canadians will have received both, “they will have to, over the course of the coming months, pay one of them back,” restated Prime Minister Justin Trudeau.

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