One of the most common questions we have received from employers since the introduction of the Canada Emergency Response Benefit ("CERB") is whether they can top-up the CERB through a Supplemental Unemployment Benefit ("SUB") Plan as is common with regular EI Benefits. Although there has been much speculation on this point from practitioners in the field, until now the answer to this question has frustratingly been "we just don't know."
The purpose of a SUB Plan is to provide supplemental payments to EI Benefits during a period of unemployment due to: temporary stoppage of work; training; illness, injury or quarantine. These payments are not deducted from the employee's benefits, nor are they considered insurable earnings under the Employment Insurance Act (which means EI premiums are not deducted). For further information on SUB Plans, see our blog here.
On May 8, 2020, the Federal Government confirmed in an updated Q&A resource that, given the simplified design of the CERB, employers cannot make additional payments to employees collecting this benefit through a SUB plan. However, eligible individuals collecting the CERB may earn up to $1,000 in employment and/or self-employment income in each of their benefit periods while continuing to receive the CERB. Amounts received by individuals from any employer in excess of the $1,000 threshold would create an obligation for the individuals to repay CERB amounts they received for the same benefit period.
Although this likely comes as disappointing news for employers looking for ways to support their employees through the closures brought on by COVID-19, there is still value in submitting SUB plans to Service Canada in order to top-up employees who may exhaust the 16 weeks of the CERB before a recall to work is possible and transition to regular EI benefits.
CCPartners continues to monitor announcements made by all levels of government as they are made and will continue to update you as they come.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
