CERB Recipients Deemed Ineligible After Messaging Mix-Up Won’t Be Forced to Repay

Self-employed Canadians who received up to $14,000 in Canada Emergency Response Benefit (CERB) payments but were later told they were ineligible after a messaging mix-up won’t be forced to repay.

Prime Minister Justin Trudeau made the announcement Tuesday in a reversal of his government’s previous position on the issue.

“For people who accessed CERB based on their gross income instead of net income, as long as you meet the other eligibility criteria, you will not have to return those CERB payments,” Trudeau said during a press conference.

The move comes just over a week after a proposed class-action lawsuit was filed against the federal government on behalf of retired Canadians impacted by the confusion over CERB eligibility.

In late 2020, the Canada Revenue Agency (CRA) sent out 441,000 letters saying an eligibility condition to have an income of at least $5,000 in 2019 or the 12 months before applying refers to “net pre-tax income” rather than “gross income” for self-employed individuals.

However, the original CERB eligibility guidelines did not mention the net income requirement.

Trudeau also announced Tuesday that his government is forgiving interest on certain 2020 tax debt.

“If you received federal emergency benefits – like the CERB – and you made up to $75,000 in taxable income, you will not have to pay interest on 2020 tax debt until April of next year,” Trudeau said. “Our priority is ensuring that you and your family get through this pandemic and back on your feet.”

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