Canada Emergency Response Benefit FAQ

Canada Emergency Response Benefit

In light of the COVID-19 pandemic, on March 25, 2020, the Canadian government has proposed legislation to establish a new kind of income replacement benefit called the Canada Emergency Response Benefit (CERB). The CERB will temporarily replace all new applications for Employment Insurance applications related to COVID-19 once it is in place.

The CERB gives working people who cease working and stop receiving income because of COVID-19 disruptions for at least 14 days a monthly payment of $2000.

Table of Contents

When does the Canada Emergency Response Benefit start?

The Canada Emergency Response Benefit will be in place, retroactively from March 15, 2020, until October 3, 2020. No worker is permitted to file an application after December 2, 2020.

Note, however, the program does not start until April 6. Thus, CERB Payments will not be made until some time shortly after April 6.

How long is the Canada Emergency Response Benefit?

This Canada Emergency Response Benefit would provide income replacement for up to four months for workers who lose their income as a result of the COVID-19 pandemic.

How soon can the Canada Emergency Response Benefit be paid?

Canadian residents can expect to receive their CERB payments within 10 days of application beginning after April 6. There is no one-week waiting period “deductible” like regular Employment Insurance (“EI”).

However, Canadian residents are only entitled to the CERB 14 days after their employer stopped paying them. Accordingly, for example, if an employer stops paying an employee on April 1, then the employee would only begin to receive CERB payments after April 14.

How much is the Canada Emergency Response Benefit?

The Canada Emergency Response Benefit will provide $2,000 a month for up to four months for workers who lose their income as a result of the COVID-19 pandemic.

It does not appear there is any calculation for the payment in terms of how much money someone normally makes. To that effect, it appears all workers who are approved will receive $2000 per month.

This CERB amount ($2000) appears to be actually less pay than regular EI for workers who earned over $54,200 per year. This means that instead of receiving $573 maximum per week on EI, workers on this program would only receive $500 per week. However, it does appear that EI eligibility months will not be deducted while on the CERB. Therefore, once the 4-month CERB is up for a worker, if they are still eligible, they can receive their full number of months of EI at the $573 rate.

The CERB is not a loan.

Supposedly, the CERB will be tax free, although this is not yet confirmed.

Can an employee work and earn income while on the CERB?

Yes. In short, here is how workers could get the CERB and employer income in the same month:

As a routine part of the CERB program, a worker on the CERB will need to make an online declaration every four weeks about whether they are still not working nor receiving income.

A worker will then be eligible for another CERB payment where they can show that they did not work 14 days and did not receive pay for 14 days in the last four weeks.

Accordingly, once the 14-days no work, no pay requirements have been met within a four week period, workers may work and earn income on the remaining days within the four-week period and still receive the CERB.

Hypothetically, a worker could split up work with their employer like this:

  • worker not working 14 days in a row in the month because of COVID-19 business slowdowns;
  • worker then works 10 days after that 14-day break and gets employer pay for these 10 workdays.

However, the requirement that the employee does not work 14 days because of COVID-19 business disruptions would still need to be met. The employee’s 14-day break from work and pay must be connected to COVID-19.

Can an employer top-up the CERB?

We don’t know yet. We do know however that in the draft legislation, in section 6(1)(b)(i), as a prerequisite for receiving the CERB, an employee must not receive any “income”, to which a “top-up” is probably included at this time.

However, the proposed Canada Emergency Response Benefit Act does say that the government can make a regulation that can “exclude a class of income” for the purposes of section 6(1)‍(b)‍(i). To that effect, perhaps the government will make a regulation that says an employer top-up is permitted, but they haven’t yet. We will update this article when the government releases the regulations to the Canada Emergency Response Benefit Act.

Employers who wish to top-up employees on EI are encouraged to consider the Supplemental Unemployment Benefit currently at this time.

What about the previously announced Emergency Care Benefit and Emergency Support Benefit?

The previously announced Emergency Care Benefit and Emergency Support Benefit are scrapped. The CERB replaces the previously announced Emergency Care Benefit and Emergency Support Benefit.

How will the CERB be paid?

The CERB will be paid every four weeks by direct deposit or by check delivered by letter mail. Workers are encouraged to get their direct deposit information ready.

Workers will have to log in to the online CERB portal using their My Service Canada Account or My CRA Account monthly and declare they are still eligible for the CERB before every monthly CERB payment is made.

When are applications for the Canada Emergency Response Benefit available?

Applications for the Canada Emergency Response Benefit should be available on April 6, Prime Minister Trudeau said on March 25.

What about preexisting EI applications?

Existing EI applications that came as a result of COVID-19 will be rolled into the Canada Emergency Response Benefit program. There is, apparently, no need to apply again, but we will know more soon.

Who can apply for the CERB?

Any resident of Canada who is 15 years old or older, and who, for 2019 or in the 12-month period preceding the day on which they make an application has a total income of at least $5,000 from:

  • employment; or
  • self-employment; or
  • EI maternity benefits;
  • EI parental benefits.

Who qualifies for the Canada Emergency Response Benefit?

The CERB applies to an extremely broad group of workers in Canada, including full-time employees, part-time employees, contract workers and self-employed people. The Canada Emergency Response Benefit would cover these Canadian resident workers who:

  • lost their job,
  • are sick,
  • quarantined,
  • taking care of someone who is sick with COVID-19,
  • working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures.
  • wage-earners, hourly-earners, salary-earners, as well as contract workers and self-employed individuals who would not otherwise be eligible for Employment Insurance (EI) who lost their income because of COVID-19.

Here is exactly what the draft legislation says:

  • (1)  A worker is eligible for an income support payment if
    • (a)  the worker, whether employed or self-employed, ceases working for reasons related to COVID-19 for at least 14 consecutive days within the four-week period in respect of which they apply for the payment; and
    • (b)  they do not receive, in respect of the consecutive days on which they have ceased working,
      • (i)  subject to the regulations, income from employment or self-employment,
      • (ii)  benefits, as defined in subsection 2(1) of the Employment Insurance Act,
      • (iii)  allowances, money or other benefits paid to the worker under a provincial plan because of pregnancy or in respect of the care by the worker of one or more of their new-born children or one or more children placed with them for the purpose of adoption, or
      • (iv)  any other income that is prescribed by regulation.
  • (2)  An employed worker does not cease work for the purpose of paragraph (1)(a) if they quit their employment voluntarily.”

Accordingly, to be eligible for the CERB, employees or self-employed people need to “cease working” and “not receive” income because of COVID-19 disruptions for at least 14 days.

How long did an employee need to work for?

Unlike EI, there does not appear to be a requirement that a worker worked for any set of hours before he or she is eligible for the CERB.

The CERB requirement is that a worker was employed or self employed.

Accordingly, on its face, it appears that workers who just started at their new employer are eligible for the CERB if their new employment was disrupted by COVID-19. However, the government of Canada could make regulations that change this. We will know more soon.

What are “income” and “benefits”

We are waiting on the regulations for the Canada Emergency Response Benefit Act to define what is “income” as per the proposed legislation. We expect these regulations to be released very soon.

We know that “Benefits” mean EI, not work benefits.

Do Self-employed people get the Canada Emergency Response Benefit?

Yes, unlike EI regular benefits, self-employed people are entitled to the Canada Emergency Response Benefit.

What about people who are still employed?

The CERB covers Canadian residents who have (1) stopped working and (2) lost their income in at least 14 days in a month because of COVID19.

Therefore, workers who are still employed but are not working or receiving pay because of disruptions to their work situation due to COVID-19 will qualify for the CERB. 

Likewise, workers who stop working and stop receiving pay because of COVID-19 for only 14 days every month would still be eligible for the CERB.

On the contrary, workers who are sent home with pay would not receive the CERB.

What about people already receiving EI?

Canadians who are already receiving EI regular and sickness benefits as of April 6, 2020, would continue to receive their benefits and should not apply to receive the Canada Emergency Response Benefit. If their EI benefits end, however, they could then apply for the Canada Emergency Response Benefit.

To be clear, an individual cannot receive EI and the CERB at the same time.

What about people already receiving maternity benefits?

Canadians who are already receiving EI maternity benefits as of March 15, 2020, would continue to receive their maternity benefits and should not apply to receive the Canada Emergency Response Benefit. If their EI maternity benefits end before October 3, however, they could then apply for the Canada Emergency Response Benefit.

Also, note that income from maternity benefits makes workers eligible for the CERB.

What about people already receiving parental benefits?

Canadians who are already receiving EI parental benefits as of March 15, 2020, would continue to receive their EI parental benefits and should not apply to receive the Canada Emergency Response Benefit. If their EI parental benefits end before October 3, however, they could then apply for the Canada Emergency Response Benefit.

Also, note that income from parental benefits makes workers eligible for the CERB.

What about workers who were planning on receiving EI maternity and EI parental benefits soon?

Canadians who were planning on receiving EI maternity and EI parental benefits sometime after March 15 but before October 3, 2020, should apply to receive the Canada Emergency Response Benefit if they lost income because of COVID-19. Then, once their CERB benefit runs out, they should apply for their EI maternity and EI parental benefits.

However, Canadians need to still be aware of timelines for EI maternity and EI parental benefits.

If you’re pregnant or have recently given birth you are eligible for maternity benefits. EI maternity benefits can start as early as 12 weeks before the expected date of birth and can end as late as 17 weeks after the actual date of birth.

If you are the parent of a newborn, you are eligible for parental benefits. Parental benefits must be used within 52 weeks after the child’s birth or when the child is placed with you. 

Benefit TypeMaximum weeksTimeframesBenefit rateWeekly Pay
CERBup to 16 weeksMarch 15 – October 3, 2020$500
EI Maternityup to 15 weeks12 weeks before due date – 17 weeks after birth55%up to $573
EI Standard Parentalup to 40 weeks, but one parent cannot receive more than 35 weeksWithin 52 weeks of birth55%up to $573
EI Extended Parentalup to 69 weeks, but one parent cannot receive more than 61 weeksWithin 52 weeks of birth33%up to $344

What about workers who have applied for EI already but have not received a response?

Canadians who have already applied for EI and whose application has not yet been processed would not need to reapply for the Canada Emergency Response Benefit – their application will be rolled over.

Note that Canadians who are eligible for EI regular benefits, EI sickness benefits, EI maternity benefits and EI parental benefits will still be able to receive their normal EI benefits, if still unemployed, after the four-month period covered by the CERB.

What happens when the Canada Emergency Response Benefit runs out?

After four months of the Canada Emergency Response Benefit, CERB payments will stop, but eligible individuals will be switched-over to standard EI if they are still out of work.

Where is the Canada Emergency Response Benefit legislation?

The Canada Emergency Response Benefit Act was proposed on March 25, 2020 and received Royal Assent on the same day.

What about people who were looking for work and did not have a job before COVID-19?

Upon our review of the draft legislation, it appears people who are unemployed but were actively looking work before March 15 (the retroactive date the CERB program starts on) are not eligible for the CERB. The CERB appears to only apply to employed or self-employed people who “ceased” work because of COVID-19 and earned at least $5,000 from work in 2019 or the last 12 months before the individual’s CERB application.

It appears the CERB is not for everyone who doesn’t have a job, rather it appears it is only for people who lost their work income due to the coronavirus.

What about people who quit to get these benefits?

A worker is not eligible for the CERB if they quit voluntarily.

The CERB program will only pay benefits to individuals who lose their income as a result of the COVID-19 pandemic. However, the CERB will apply to people who take a temporary, unpaid leave from work because of sickness, quarantine or because they are taking care of someone who is sick with COVID-19, as well as working parents who must stay home without pay to care for children who are sick or at home because of school and daycare closures.

However, if an employee quits involuntarily (i.e. a constructive dismissal), then they could be eligible for the CERB.

Employers will likely have to provide Service Canada information on a worker’s behalf in an ROE or something like that after the pandemic is over to prove an employee lost their job or took a leave because of COVID-19.

What about people whose job start date was pushed back because of COVID-19?

The CERB will not apply to people who are unemployed seasonal workers or students who had an offer to start working on a later date that was pushed back because of COVID-19. It appears the CERB is only for (1) employed or self-employed (2) workers who (3) “cease” working. This means that unless an employee was already working, they are not eligible for the CERB.

Here is exactly what the draft legislation says, with bolded highlights, making unemployed people (including students) ineligible for the CERB:

….“6(1)  A worker is eligible for an income support payment if

(a)  the worker, whether employed or self-employed, ceases working for reasons related to COVID-19 for at least 14 consecutive days within the four-week period in respect of which they apply for the payment; and …

Section 6(1) of the Canada Emergency Response Benefit Act

Do workers get EI and the CERB?

No, eligible workers are entitled to the CERB first, then EI once the CERB runs out. Think of the CERB as being there to replace income instead of EI for the first four months of COVID-19 related job loss.

How will severance pay affect the CERB?

People who are terminated from work without cause because of COVID-19 are generally entitled to severance.

Typically, with regular EI, you cannot get EI until the severance “period” expires. A severance “period” is the amount of “months” of pay a severance package is worth.

When someone goes on EI, and later receives a severance package they will have to pay Service Canada back for all the EI they received in their severance period. Service Canada will backdate a severance package as if someone got this money the day they were terminated from work even if they negotiated it many months later.

At present we don’t know for the CERB.

But, we do know that the CERB will only pay benefits to those who lost their “income”.

Accordingly, there is a chance that if someone is terminated because of COVID-19 business slowdowns, and they receive a severance package, they cannot receive the CERB until the severance expires. A more complex situation is if someone goes on the CERB and later gets a severance. In this case, it is possible that their employer, or the employee, may have to pay back Service Canada for the CERB payments.

Analyzing the Draft Legislation

As per the draft Canada Emergency Response Benefit Act, it appears the CERB is only for workers who “cease” working and do not receive “income”.

At first glance, under section 12(1) of the Canada Emergency Response Benefit Act, a worker who received CERB payments while they received severance “income” may have to repay the CERB payments. Here is what it says, exactly:

12  (1)  If the Minister determines that a person has received an income support payment to which the person is not entitled, or an amount in excess of the amount of such a payment to which the person is entitled, the person must repay the amount of the payment or the excess amount, as the case may be, as soon as is feasible.

Return of erroneous payment or overpayment

We don’t yet know if this legislation makes it possible that an employer or an employee may have to pay back Service Canada for CERB payments made while someone was on their severance period. We are waiting for the accompanying regulations to the proposed legislation which should define whether severance is considered “income”. If it is, then CERB payments made while someone is on their severance period may have to be paid back. After all, the CERB is only for workers who “cease” working and do not receive “income”.

Note that traditionally, severance is considered “income”.

Will employers have to fill out an ROE for the CERB?

We don’t yet know if the CERB will require an employer to fill out an ROE, however, we expect that they will have to. Employers should still, therefore, complete employee ROEs like normal as soon as an employee’s earnings are interrupted (i.e. layoff, termination, leave, or reduction in hours).

Under the old insurance Employment Insurance laws, employers had five days to complete an ROE. We expect the same deadlines for the CERB.

Perhaps, nonetheless, in light of the demand and the lack of resources due to COVID-19, employees will be eligible for the CERB before an employer completes the ROE (unlike for regular EI). We will update this FAQ when we know more.

How to apply for the Canada Emergency Response Benefit?

The website for applying for the CERB will be available in early April. Remember, the Canada Emergency Response Benefit program does not start making payments until April 6. We expect applications to be submitted using a My Service Canada or My CRA account or by using a new toll-free number. However, nothing is confirmed.

Workers who are eligible for EI who have lost their job or are sick or quarantined can still continue to apply for regular EI types here. If workers do not receive approval from Service Canada regarding their EI application in the next two weeks, they can expect that their EI application will be rolled over to the CERB application automatically.

All of the information in this article is opinion, not fact. Do not rely on this article for legal advice. We will update this article when the government of Canada releases more information as it comes in.

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