In the early days of the COVID-19 crisis, as the federal and provincial governments rushed to rollout a whirlwind of relief benefits, Canadians applied for income support programs for which they believed they were eligible–one of the most readily available being the Canada Emergency Response Benefit (CERB) Some of those applications were later deemed inappropriate, with recipients required to repay some or all of the CERB benefits they received.
The Canada Revenue Agency now estimates that as many as 98,000 of the individuals that received (but were ineligible for) CERB were students who could have claimed the Canada Emergency Student Benefit (CESB) instead. The CESB provided relief–$1,250 over a four-week period to a maximum of 16 weeks–to post-secondary students and recent post-secondary and high school graduates who were unable to work due to COVID-19 lockdowns or social distancing restrictions. Applicants were not permitted to claim more than one of the CERB or CESB for the same period.
Now, a new federal remission order is offering relief to students caught in the CRA’s CERB repayment net–some of whom could otherwise be required to repay as much as $14,000, depending on the number of benefit periods for which they received CERB payments. Under the order, repayment of a portion of CERB benefit overpayments will be provided to qualifying individuals who meet these conditions:
- The person received “… an income support payment under the Canada Emergency Response Benefit Act for a four-week period in which they were not eligible for the payment, and the person has repaid or is to repay the payment under subsection 12(1) of that Act
- For that four-week period, the person would have been eligible for a Canada emergency student benefit under the Canada Emergency Student Benefit Act if they had not received the income support payment for that period
- The person did not receive a Canada emergency student benefit for that period;
- The person applied for the income support payment for that period not later than September 30, 2020
- The person files with the Minister of National Revenue, not later than December 31, 2022, a return of income under the Income Tax Act in respect of each of the 2019 and 2020 taxation years and
- The person applies for the remission in the form and manner specified by the Minister of Employment and Social Development”
The government says the order is intended to limit financial hardship experienced by students resulting from the pandemic. It also has the potential to address the often-confusing benefit program eligibility requirements that prompted many Canadians to apply for relief measures to which they were not entitled.
For more information on the remission order, or to apply for relief, visit the new government website designed to help recipients understand whether they qualify for credit towards their CERB debt.
For more information about this or any other federal COVID-19 benefit program, contact a member of our team.
Armando Iannuzzi, Co-Managing Partner