Updates to COVID -19 Canadian Responses for Individuals – August
Welcome back to our pandemic updates flyer! We’ve lost count of the issue number, so we will call this the August Edition of our Pandemic Updates for Canadian Individual Taxpayers. In this update, we will share with you where the Canadian government currently stands on helping out its residents dealing with loss of employment, revenue, workforce and other challenges brought about by Covid-19.
Changes to Tax Filing and Installment Deadlines
Firstly, we would like to share with you that the personal, corporate and installment deadlines have been further pushed back. The September 1st 2019 filing and payment deadline has now been moved to September 30th, along with the 2020’s Q2 and Q3 installments. However, don’t let this good news discourage you from bringing in your 2019 tax information as soon as possible so we can start to wrap up what is – officially – the longest tax season on record.
For Individuals and the Self-Employed
I think it’s safe to say that the theme for our August updates is enhancements. Individuals and self-employed Canadians who’ve been impacted by the pandemic will be happy to know that there are enhancements to the government’s current Employment Insurance (EI) program for those transitioning off of the Canada Emergency Response Benefit (CERB) as well as the addition of the three “recovery” programs for those not eligible for EI.
Transitioning From CERB to EI
The CERB has been extended for an additional four weeks, for a total of 28 weeks of benefits, ending on September 27. But have no fear! As of September 27, CERB recipients may be able to transition to what the government has dubbed the “simplified” EI program, if they qualify.
Fortunately, it becomes easier to qualify under the simplified program. For example, EI claimants only need 120 insurable hours of work under their belts to be eligible, representing a one-time “hours credit” of 300 hours for regular benefits and 480 hours for special benefits such as sickness or maternity/parental leave. The hours credit is retroactive to March 15, 2020 for self-employed individuals who were not previously eligible due to insufficient hours, and it is available to new claimants for one year.
In addition, the minimum EI benefit is $400 per week for regular claims and $240 for extended parental benefits, for at least 26 weeks.
The Canada Recovery Benefit
Coming into effect on September 27, 2020 for one year, individuals who are not eligible for EI (e.g. those who are self-employed, working in the gig economy or have exhausted EI entitlements because they were using the benefit prior to the pandemic’s advent) may be eligible for the Canada Recovery Benefit (CRB). The CRB is $400 per week for up to 26 weeks. To be eligible for the CRB, individuals must:
- Be at least 15 years of age and hold a valid Social Insurance Number;
- Have stopped working due to the pandemic but are actively looking for work;
- Be working but have seen reduced employment/self-employment income due to the pandemic;
- Not be eligible for Employment Insurance;
- Have had employment and/or self-employment income of at least $5,000 in 2019 or in 2020; and
- Not have quit their job voluntarily.
Claimants will have to apply for this taxable benefit every two weeks for the preceding two-week period and attest that they are looking for and would accept work. Claimants are able to earn income while receiving the benefit, however, some or all of the benefit will need to be repaid through their income tax return if their annual net income, excluding the CRB payment, exceeds $38,000. According to the government website, “…claimants would need to repay $0.50 of the benefit for each dollar of their annual net income above $38,000 in the calendar year to a maximum of the amount of benefit they received.”
The Canada Recovery Sickness Benefit
Also coming into effect on September 27 for one year is the availability of the Canada Recovery Sickness Benefit (CRSB). This benefit is quite specific to COVID-related illness and provides $500 per week for up to two weeks. Also a taxable benefit, the CRSB is for individuals who are sick or must self-isolate due to COVID-19 and must also:
- Be a resident of Canada, at least 15 years of age, and have a valid SIN
- Be employed or self-employed when the application is made
- Have earned at least $5,000 in 2019 or in 2020
- Not receive other paid sick leave for the claim period
- Miss at least 60% of scheduled work for the claim period.
There is no requirement for a medical certificate to qualify.
The Canada Recover Caregiving Benefit
In anticipation of the dreaded second wave, the further reopening of the economy and impending back-to-school complications, the government is offering the Canada Recovery Caregiving Benefit (CRCB). This benefit is intended for parents and caregivers who can’t work because they have to stay home to care for a child or dependent and is $500 per week for up to 26 weeks per household.
The eligibility criteria for the CRCB is the same as the CRSB, but individuals must also have been unable to work for at least 60% of scheduled hours because they are taking care of a child under 12 years of age whose school or daycare is closed or operating on a decreased schedule due to the pandemic. This benefit could also be available to parents if their child under 12 is advised to stay home from school or daycare for medical reasons or their caregiver is not available for COVID-related reasons. The CRCB also extends to parents or caregivers who provide care to a family member with a disability or a dependent who cannot attend school or daycare for COVID-related reasons.
In addition, recipients of this CRCB cannot be receiving the CERB, the EI Emergency Response Benefit (ERB), the Canada Recovery Benefit, the Canada Recovery Sickness Benefit, short-term disability benefits, workers’ compensation benefits, or any EI benefits or Quebec Parental Insurance Plan (QPIP) benefits during the same claim period.
Stay tuned for our Back-to-School issue likely to come in September! In the meantime, if you have any questions about these programs, please call us at HCBT.