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FTB: CERB or EI — how to get it if you need it

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Today is the first day Canadians can apply for the new Canada Emergency Response Benefit, so I’m hijacking this post to tell you what you need to know.

Canadian quarter coin commemorating the Vancouver Winter...
This quarter won’t get you far.
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Since this article is still attracting readers, know that this was information as of the original date of publication. This program has and may continue to change. See official sites for the most up to date information.

UPDATE: The new eligibility criteria as of April 18 is:

When submitting your first claim, you cannot have earned more than $1,000 in employment and/or self-employment income for 14 or more consecutive days within the four-week benefit period of your claim.

When submitting subsequent claims, you cannot have earned more than $1,000 in employment and/or self-employment income for the entire four-week benefit period of your new claim.

Today is the first day that you can apply for Canada Emergency Response Benefit (CERB). This benefit was announced recently as a replacement for Employment Insurance (EI) for people who have stopped working because of COVID-19.

CERB is $500 per week for up to 16 weeks. Please note, that is not “up to” $500. It’s a straight $2,000 per month for four months. Will it last longer than that if it needs to? No one can answer that right now.

The official site: https://www.canada.ca/en/services/benefits/ei/cerb-application.html

EI and CERB

CERB was not available before today. It’s relatively amazing the application process is up and running already, but before today, people who had stopped working were being encouraged to apply for EI, and millions of Canadians did so. Service Canada, the arm of the Federal Government who administers EI, has processed some of those claims, and can now work all out to finalize them.

The most important thing to understand is that from today on, there is one benefit, and it is CERB. If you applied for EI beginning on March 15, your application will be converted to a CERB application automatically:

The other benefits administered through EI like maternity, parental or caregiving still exist, and you can apply in the normal way.

The takeaway: If you’ve stopped working, apply for CERB if you haven’t already applied for EI.

Eligibility

The base eligibility:

The benefit will be available to workers:

* Residing in Canada, who are at least 15 years old;

* Who have stopped working because of COVID-19 or are eligible for Employment Insurance regular or sickness benefits:

* Who had income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and

* Who are or expect to be without employment or self-employment income for at least 14 consecutive days in the initial four-week period. For subsequent benefit periods, they expect to have no employment income.

The income of at least $5,000 may be from any or a combination of the following sources: employment; self-employment; maternity and parental benefits under the Employment Insurance program and/or similar benefits paid in Quebec under the Quebec Parental Insurance Plan.

The Benefit is only available to individuals who stopped work as a result of reasons related to COVID-19. If you are looking for a job but haven’t stopped working because of COVID-19, you are not eligible for the Benefit.

For example if you are a student who had a job last year and were planning on working this summer you do not qualify for the benefit.

And further:

The Canada Emergency Response Benefit is available to those who stop working for reasons related to COVID-19 or are eligible for Employment Insurance regular or sickness benefits. Examples of stopping to work could include but are not limited to:

* You have been let go from your job or your hours have been reduced to zero;

* You are in quarantine or sick due to COVID-19;

* You are away from work to take care of others because they are in quarantine, sick due to COVID-19; and/or

* You are away from work to take care of children or other dependents whose care facility is closed due to COVID-19.

You cannot quit your job voluntarily.

There are more complex answers to questions about eligibility on the site linked above. Read through that page before you apply.

The takeaway: CERB is for people who were working and now aren’t, even temporarily.

Before you Apply

There’s something else you need to take care of before you apply, as well. The requirement to have $5,000 in income in 2019 or the 12 months prior to applying is important to note. Students and other young people who have only ever worked part-time, low-paid jobs often don’t file tax returns until they have to. It’s in your interest to have filed your 2018 and/or 2019 tax return if you’re about to apply for this benefit. It’s in your interest to have set up direct deposit before you apply for this benefit.

CERB will be paid by cheque to all people who don’t have direct deposit set up. The estimates given for the time for a cheque to appear are 10 days. Three days is the estimate for the direct deposit payment to appear. Both numbers are counted from the date the application is approved, of course, not when you apply.

You cannot set up direct deposit as part of the CERB application online. CERB is being administered by the Canada Revenue Agency (CRA) not Service Canada, so they are using their already existing system of payment processing. If you have “My Account” with CRA, set up or check your direct deposit information fist. If you don’t have My Account, you can only apply for CERB by phone. You must have My Account set up to use the online application.

The takeaway: Set up My Account and direct deposit before you apply. Consider filing your 2019 tax return if you haven’t.

My Account and Filing Your Taxes

My Account is a secure portal that gets you access to your personal tax and benefit information. Because it needs to be secure, setting it up can be cumbersome, and in some cases requires a security code sent via regular mail. If you have never signed up before, the easiest way is via a third-party partner, usually your bank. If you don’t bank with one of the institutions listed at the link above, start the registration process to do it the other way.

You need to have filed a tax return for 2019 or 2018 to sign up, and you will be required to enter a number off of that return, so find your digital or paper copies before you start. Any time you call CRA, you will have to verify your identity with numbers you have filed on your returns. If you haven’t filed at least your 2018 return, do that first.

The percentage rate of Canadians who haven’t filed returns at all when they are required to is surprisingly high, and many students or other low-income earners who aren’t required to file, don’t. The percentage of Canadians in a normal year who haven’t filed that year’s return by early April is over 40%.

Once you have My Account successfully set up, don’t forget to set up or verify your direct deposit information.

Note: I was able to test the signup process for a new My Account via banking credentials. It’s quick, but you do not get access to your direct deposit information until they mail you the security code via regular mail. If CRA has the wrong address or direct deposit information on file, call and correct this first before you do anything else. You can still apply for CERB online via a new My Account login without that security code.

The takeaway: Now is the time to make sure the information CRA has on file for you is accurate and up to date.

Why $500 for everyone?

For the next 16 weeks, anyone who could normally qualify for EI, will be getting the flat rate CERB $500 per week instead. Even if EI would have paid them more or less than that, $500 it is.

Why?

The answer is the word millions. Millions of Canadians need this benefit right now. Service Canada has been overwhelmed trying to process the largest number of EI applications they’ve ever seen. CRA is setup to surge to a larger volume of work every year, and that just happens to be right now. They are taking up the task, and the task has been stripped of all its complexity to make it possible to get a fast turnaround time on money.

This is Kasperi Kapanen on a breakaway — speed over finesse.

This program might get refined over time, and there’s already talk that the students who would be working, but their summer job never started will be getting looked after in the coming days.

Avoiding the Rush to Apply

CRA knows they’re going to get a rush of applications beginning today. They have asked people to follow this process:

Day to apply for the Canada Emergency Response Benefit

If you were born in the month of Apply for CERB on Your best day to apply
If you were born in the month of Apply for CERB on Your best day to apply
January, February or March Mondays April 6
April, May, or June Tuesdays April 7
July, August, or September Wednesdays April 8
October, November, or December Thursdays April 9
Any month Fridays, Saturdays and Sundays

The Takeaway: Don’t rush, get your information ready, and make sure you’ve got My Account set up to apply online. Follow the guidelines on which day to apply.

Support for Others

Some self-employed people are eligible for CERB, so read the guidelines to see if you qualify. For business owners, you need this link to keep track of the officially implemented programs: https://www.canada.ca/en/department-finance/economic-response-plan/covid19-businesses.html

Sometimes implementation issues change details of these programs from what was announced, so try to stick to the official source for your information and don’t rely on things you or someone else remember reading a week ago.

Many of you aren’t Canadians or Canadian residents. For Americans, this Washington Post story is not behind their paywall:

Talk to your relatives, particularly those who aren’t naturally inclined to get organized and handle this sort of task. See if they need your help. Now doesn’t seem to be the time for life lessons learned the hard way, so let’s see if we can make everyone’s life a little easier.

One final note, scams of all kinds are on the rise, and there are many people fooled by various tax-related text, email and phone scams. Learn how to spot them and tell your more gullible relatives what not to do. CRA will never ask for your banking information in an email.

I hope this information helped you out.

The takeaway: We’re all in this together.

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