Breakdown of the New Canada Emergency Response Benefit
Updated: Mar 26, 2020
On Wednesday March 25th, the Canadian government announced a proposed legislation to establish the Canada Emergency Response Benefit (CERB). This will be a taxable benefit of $2000 per month for up to four months for workers who lose their income due to the COVID-19 pandemic. This will replace the 2 benefits that were announced last week: the Emergency Care Benefit and the Emergency Support Benefit.
How do you apply?
The Canadian government will set up an online portal where eligible individuals can apply for the benefit. This is scheduled to be available from the week of April 6th, and eligible applicants can expect to start receiving the benefit within 10 days of applying.
Who are eligible for the benefit?
The benefit will cover Canadians who have lost their job, are sick, quarantined or taking care of someone who is sick with COVID-19, as well as working parents who have to stay home without pay to care for children who are sick or at home because of closure of schools and daycares.
In addition, workers who are still employed but aren't receiving income due to disruptions to their work situation due to COVID-19 will also qualify for the benefit. This also applies to self-employed and contract workers.
Canadians who are already receiving EI regular and sickness benefits as of March 25th will continue to receive their benefits and should not apply for the CERB. Those who have already applied for EI and are still waiting for their application to get processed should not reapply.
Applicants must be at least 15 years of age and have earned revenue of $5000 or more within the last 12 months or in the 2019 tax year. This includes:
Employment
Self-employment
Maternity or parental benefits
allowances, money or other benefits paid to the person under a provincial plan because of pregnancy or in respect of the care by the person of one or more of their new-born children or one or more children placed with them for the purpose of adoption.
As it currently stands, workers may apply for an income support payment for any four-week period falling within the period beginning on March 15, 2020 and ending on October 3, 2020. Payments will be made every 4 weeks.
Business Implications
With employees being able to claim the $2000 benefit while continuing to work without receiving income from their employer, employers will be in a much better state to continue operations as normal. The idea is that they should not have to lay off employees in the case that they have to reduce their payroll expenses, and they will be supported to keep their employees working for up to 4 months.