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October 02, 2020 | Blog

Recovery Benefits

From tax expert Gerry Vittoratos

As the federal government begins to wind down Canada Emergency Response Benefit (CERB), new programs have been announced to help individuals who are encountering continued financial hardships.

Canada Recovery Benefit

The Canada Recovery Benefit will provide a benefit amount of $500 per week for up to 26 weeks to workers who are not eligible for EI, such as self-employed individuals. This new benefit would take effect as of September 27.

Eligibility checklist

 

at least 15 years old and have a valid Social Insurance Number (SIN)

 

stopped working due to the COVID-19 pandemic and are available and looking for work; or are working and have had a reduction in their employment/self-employment income for reasons related to COVID-19

 

not eligible for EI

 

employment and/or self-employment income of at least $5,000 in 2019 or in 2020

 

not quit their job voluntarily

 

This benefit will be taxable. Workers can apply every two weeks and attest that they still meet the requirements to continue receiving the benefit. Workers would also need to look for and accept work when it is reasonable to do so.

The benefit must be repaid at a 50% rate for each dollar annual net income above $38,000 in the calendar year to a maximum of the amount of benefit they received. For example, if you received a month’s worth of the Canada Recovery Benefit ($400 X 4 = $1,600), and you have an annual net income of $40,000, then you must repay $1,000 worth of the benefit back. The repayment will be done when filing an income tax return.

Canada Recovery Sickness Benefit

The Canada Recovery Sickness Benefit will provide $500 per week, for up to 2 weeks, for workers who are unable to work because they are sick or must self-isolate due to COVID-19. The benefit would take effect as of September 27, 2020 and would be applicable for 1 year.

Eligibility checklist

 

resident of Canada, at least 15 years of age and have a valid Social Insurance Number (SIN)

 

employed or self-employed at the time of the application

 

earned at least $5,000 in 2019 or in 2020

 

missed a minimum of 60% of their scheduled work in the week for which they claim the benefit

 

The benefit is taxable. Workers would apply after the one-week period in which they are seeking income support and attest that they meet the requirements.

Canada Recovery Caregiving Benefit

The Canada Recovery Caregiving Benefit would provide $500 per week, for up to 26 weeks per household. The benefit will be paid to individuals unable to work because they needed to provide care to children or support to other dependents who had to stay home.

Eligibility checklist

 

resident of Canada, at least 15 years of age and have a valid Social Insurance Number (SIN)

 

employed or self-employed at the time of the application

 

earned at least $5,000 in 2019 or in 2020

 

unable to work for at least 60% of their normally scheduled work within a given week because of one of the following conditions:

• they must take care of a child who is under 12 years of age on the first day of the period for which the benefit is claimed:

o   because their school or daycare is closed or operates under an alternative schedule for reasons related to the COVID-19 pandemic

o   who cannot attend school or daycare under the advice of a medical professional due to being at high risk if they contract COVID-19, or

o   because the caregiver who usually provides care is not available for reasons related to the COVID-19 pandemic, or

• provide care to a family member with a disability or a dependent:

o   because their day program or care facility is closed or operates under an alternative schedule for reasons related to COVID-19

o   who cannot attend their day program or care facility under the advice of a medical professional due to being at high risk if they contract COVID-19, or

o   because the caregiver who usually provides care is not available for reasons related to the COVID-19 pandemic

 

not be in receipt of paid leave from an employer in respect of the same week, and

 

not be in receipt of 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 in respect of the same week

 

The benefit is taxable. Two members residing in the same household could not be in receipt of the benefit for the same period.

For more information, please consult the link below:

https://www.canada.ca/en/employment-social-development/news/2020/08/supporting-canadians-through-the-next-phase-of-the-economy-re-opening-increased-access-to-ei-and-recovery-benefits.html#anch2

These benefits are preliminary; the Government of Canada intends to introduce a bill to make them official.

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