CERB Repayment & CEBA Forgiveness is Happening for Some
On Tuesday, the Government of Canada announced that it would no longer seek repayment of the Canada Emergency Relief Benefit (CERB) from self-employed individuals who had $5,000 gross income in 2019, or during the 12-month period leading into their first claim.
“For people who accessed CERB based on their gross income instead of net income – as long as you met the other eligibility criteria, you will not have to return the CERB payments,” commented Prime Minister Justin Trudeau.
Self-employed individuals who made less than $5,000 net income and already began repaying the CERB, will get this money back from the Canada Revenue Agency and Service Canada. Further details of how and when these funds will get back to people “will be available in the coming weeks.”
This news follows many months of strife amongst Canadians who felt mislead, or confused, by how the federal government presented the CERB’s eligibility requirements and subsequent repayment requests.
The main point of contention for some self-employed Canadians was the belief they could collect the CERB with $5,000 gross income. The CRA said the CERB was always tied $5,000 net income, not gross.
This issue truly came to light in November when the Canada Revenue Agency sent out what it called “education letters” to about 441,000 Canadians it believed didn’t meet the CERB’s eligibility standards.
As people began to absorb this letter, members of the media and public citizens discovered that the federal government wasn’t clear about the net income eligibility requirement until after the CERB application process began. Initially, the CRA fought back against this.
By late December, reports surfaced about CRA customer service representatives providing the wrong information to those applying for the CERB. This mistake was owned up to rather quickly.
“The Government of Canada acknowledges that communications on this topic were unclear in the first days after the CERB was launched,” commented CRA spokesperson Sylvie Branch in a statement provided to CTVNews.ca at the time.
“This includes both the CERB webpages, and the information provided to call centre agents,” it continued. “We regret that this lack of consistent clarity led some self-employed individuals to mistakenly apply to CERB despite being ineligible.”
By December, Prime Minister Justin Trudeau tried to calm the waters, saying that the government would work with Canadians who’d potentially have to repay upwards of $14,000 received through the CERB.
In January, though, uncertainty still lingered, especially when Minister of Employment, Workplace Development and Disability Inclusion, Carla Qualtrough, said CERB forgiveness “wasn’t on the table” for those who claimed to have received misinformation.
“We haven’t changed our mind on that,” read a statement Qualtrough’s office provided to CTV. “We have always said that we will look at our options and make a decision once we have all the necessary information.”
During this time, the federal government was pressured by a publicized petition sponsored by Green Party MP Paul Manley, as well as a proposed class action lawsuit on behalf of pensioners who collected CERB in good faith.
One has to think the Government of Canada realized its net income versus gross income error became too big to overcome, and that public backlash would continue until a real solution was put into place.
Additional Tax Season Relief
Also on Tuesday, Minister of National Revenue, Diane Lebouthillier said the Government of Canada will provide “targeted interest relief” to individuals who had a total taxable income upwards of $75,000 in 2020 and received income support from one of the following:
- The Canada Emergency Response Benefit (CERB)
- The Canada Emergency Student Benefit (CESB)
- The Canada Recovery Benefit (CRB)
- The Canada Recovery Caregiving Benefit (CRCB)
- The Canada Recovery Sickness Benefit (CRSB)
- Employment Insurance Benefits
- Similar Provincial Emergency Benefits
Explained the Government of Canada: “Once individuals have filed their 2020 income tax and benefit return, they will not be required to pay interest on any outstanding income tax debt for the 2020 tax year until April 30, 2022.”
-by Adam Grant
Some self-employed Canadians caught up in CERB confusion won't have to repay: https://www.cbc.ca/news/politics/pandemic-benefits-tax-canada-1.5906728
Ineligible self-employed Canadians who received CERB due to 'unclear' information won't be forced to repay
https://nationalpost.com/news/politics/ineligible-self-employed-canadians-who-received-cerb-due-to-unclear-information-likely-wont-be-forced-to-repay
Government won't forgive CERB repayments over net-gross problem despite messaging mix-up
Government of Canada addresses CERB repayments for self-employed individuals and announces interest relief on 2020 income tax debt due to COVID-19 related income support
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Who Is Matt McKeever?
Matt McKeever is a CPA, CA and Real Estate Entrepreneur in London, Ontario. On his YouTube Channel with over 70,000 subscribers and 4,000,000 views Matt discusses a variety of real estate and personal finance strategies and tactics. Including: How to BRRRR Real Estate, The Importance of Investing for Cash Flow, How to Reach Financial Independence Retire Early, Safe Withdrawal Rates, Frugality and Reducing Personal Consumption & Embracing Minimalism.
Matt began investing in real estate at age 25 by purchasing a student rental near Fanshawe College