On March 25, 2020 the Federal Government announced that a new benefit would be available to employees unable to work because of COVID-19 - the Canada Emergency Response Benefit ("CERB"). This bulletin provides an overview of the new CERB and how it affects employees' entitlements to Employment Insurance ("EI") benefits.
What is CERB?
The CERB provides $2,000 a month for up to four months to individuals who have ceased working due to COVID-19. By contrast, EI benefits are 55% of normal weekly earnings, up to a maximum of $573 per week.
The CERB replaces the previously announced Emergency Care Benefit and the Emergency Support Benefit.
When will the CERB be available?
The online portal to apply for CERB will be available in early April 2020. The Federal Government has committed to making CERB payments within 10 days of application.
The CERB is paid every four weeks and available from March 15, 2020 until October 3, 2020.
Who is eligible?
The CERB is available to individuals aged 15 or over who:
- had income of at least $5,000 in 2019 or the 12 months preceding their application for the CERB;
- cease working for reasons related to COVID-19; and
- receive no income for at least 14 consecutive days within the four-week period for which the CERB is claimed, regardless of whether they are EI-eligible or not.
According to the Federal Government's announcement, this would include individuals who are:
- unemployed due to termination of employment;
- 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;
- still employed, but are not receiving income because of disruptions to their work situation due to COVID-19; and
- contract workers and self-employed individuals who would not otherwise be eligible for EI.
An employee who quits voluntarily is not eligible for the CERB.
EI or CERB?
As mentioned above, the CERB is available to eligible individuals whether they are EI-eligible or not. The Federal Government has indicated that:
- individuals who are already receiving EI regular and sickness benefits would continue to receive their benefits and should not apply for the CERB;
- individuals who have already applied for EI and whose application has not yet been processed would not need to re-apply. It is not clear whether this means that the EI applications already in the system will continue to be processed in the normal course or be automatically "converted" into CERB applications; and
- individuals whose EI benefits cease before October 3, 2020 could apply for the CERB once their EI benefits cease, if they are unable to return to work due to COVID-19.
It is not clear whether the CERB will replace EI entirely during the period of March 15, 2020 to October 3, 2020, as the Federal Government's announcement seems to suggest that individuals can continue to apply for EI.
Can an employer provide top-up payments to the CERB?
As of now, the answer is no. Individuals are eligible for the CERB if they do not receive income from employment or self-employment during the days on which they have ceased working. It remains to be seen if the Federal Government will introduce regulations that would allow individuals to receive top-up benefits from their employers without eliminating or reducing the CERB, similar to the Supplemental Unemployment Benefit Program for EI.
Is the CERB taxable?
Despite media reports to the contrary, the Prime Minister stated in his televised address on March 27, 2020 that the CERB is taxable, but deductions will not be made at source. That will mean individuals will receive the entire $2,000 every four weeks.
At the time of writing, we are still awaiting details of the program, including the application process. If you have any questions in the meantime, please do not hesitate to reach out to us.
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.