COVID 19 – Canada Emergency Response Benefit for Workers

The federal government’s new proposed legislation has provided details with respect to the previously announced emergency relief for workers that have lost their jobs or income due to the COVID-19 crisis.  The government is still in the process of finalizing the application method.

There are effectively two parallel benefits available: 1) through Employment Insurance (EI) and; 2) The Canada Emergency Response Benefit (CERB) for those not eligible for EI.  We have previously discussed the EI benefits available.

The CERB applies to wage earners as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI) or are not receiving EI due to the delays caused by the number of applications.  The specific details are as follows:

1. The benefit is up to $2,000 per month for up to 16 weeks between March 15, 2020 and October 3, 2020;
   • It appears that the payments will be based on the number of weeks not working so we assume the monthly payments will be in $500 increments between $500 and $2,000 depending on the amount of time missed;
2. During 2019 or the 12 month period prior to the application, the worker must have earned at least $5,000 of employment income, self employment income, certain EI benefits, and/or certain provincial plans providing payments for pregnancy and care of infants;
3. The worker is not receiving income because they have ceased working for at least 14 consecutive days during the month (four week period);
4. The reason they have ceased working is for reasons related to COVID-19;
5. They have not received any of the following in respect of the period the ceased working:
   • Income from employment or self employment;
   • EI benefits;
   • Allowances or benefits under certain provincial plans providing payments for pregnancy and care on infants.

The legislation indicates that this relief is not available to a person who quits their employment voluntarily.   Presumably, the requirement that the cessation of work is in respect of COVID-19 would be met for the previously announced reasons:

1. The worker has lost their job;
2. They are sick, quarantined, or taking care of someone who is sick with COVID-19, 
3. They are working a parent who must stay home without pay to care for children who are sick or at home because of school and daycare closures; or;
4. They are still employed or carrying on business but have been laid off or are not earning income from self-employment due to business closure.

If a person is receiving EI benefits scheduled to end before October 3, 2020, they could apply for the CERB once their EI benefits cease if they are unable to return to work due to COVID-19.  

It is unclear how this program will apply to the owners of small business corporations due to the requirement to “cease working”.  It also appears that no relief will be available to those owners that were paid by way of dividend rather than salary.

The applications will be available “soon” and payments will not start prior to April 6^th.  An application cannot be made after December 2, 2020.

Our office remains open, but restrictions are in place to protect you, our team members, and their families.  Many of our team are working remotely and measures have been put in place to reduce the risk of infection from the transfer of documents.  We request that wherever possible you communicate with our offices via telephone or electronically and your documents be uploaded using our website portal or faxed to us.   We will communicate any change in this situation to you.

If you have any questions about these matters, please contact us.

This summary deals proposed matters that are complex and may not apply to particular facts and circumstances. As well, the material and the references contained therein reflect laws and practices which are subject to change. For these reasons, this material should not be relied upon as a substitute for specialized professional advice in connection with any particular matter.

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