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Canada Emergency Response Benefit CERB – Common Questions

Am I eligible for CERB?

COVID-19 is spreading its grasp all over the world. Like other governments, the Canadian government has also stepped in to check the adverse impact of the disease. The government came up with the Canada Emergency Response Benefit (CERB) to help business owners, employees, and self-employed get much-needed financial relief. The program combines the two other previously announced benefits, the Emergency Care Benefit and the Emergency Support Benefit to streamline the process.

Note: Covid-19 is a rapidly and continuously evolving situation. Canada Revenue Agency is continuously updating information of different benefits. This post is regularly updated at the end of every day. It might be possible that the most recent announcements are not yet updated here. In such a situation, please visit this page again the next day.

Important Alert About this Post:

This post was meant to answer common questions at the beginning of the pandemic. Since then the Canada Revenue Agency has updated its pages and have issued detailed explanations to frequently asked questions. This post is not being updated anymore.

Please visit the CERB page on CRA Website here.

Also Read: How CRA plans to detect if you are eligible for CERB or not?

What is Canada Emergency Response Benefit (CERB)?

The CERB gives financial relief to people whose livelihood has been affected by the spread of coronavirus. The scheme will help people who lost their income due to COVID and help them with $2,000 per month. CERB also covers individuals who are not covered by Employment Insurance (EI).

You can find the legislation passed here, CERB Act (Bill C-13).

Who is eligible for CERB?

Only “Eligible workers”.

You are considered as a worker under the CERB Act if you are 15 years of old, a Canadian resident, and have a minimum income of $5,000 in 2019 or 12 months before the date of application from the sources of income mentioned in the Act. Sources of income mentioned are employment, self-employment; benefits paid under certain subsections of the Employment Insurance Act (not mentioned here to avoid confusion), and certain allowances paid for pregnancy, newborns or adoptions. (To read the exact definition, please follow the link of the Act as mentioned above).

The worker as defined by the Act and mentioned above is eligible if the below two conditions are met:

  1. The worker stopped the work for a minimum of 14 consecutive days in a four week period (or expect to not have work) due to reasons related to Covid-19.
  2. The worker did not receive any of the below:
    1. Employment or self-employment income
    2. EI benefits (subsection 2(1))
    3. allowances under a provincial plan due to pregnancy, care for new-born children or newly adopted children
    4. any other income as prescribed in the regulation.

Freelancers, home-based businesses, sole proprietorships, and partnerships are considered forms of self-employment. If you are running a corporation and drawing dividends only, you are not a self-employed person. Dividends are investment income.

EXPANDED Eligibility for CERB

April 15, 2020 – Updated 

The government has expanded eligibility rules to cover more workers under CERB.

  1. Seasonal workers who have run out of Employment insurance are eligible now
  2. People with reduced working hours who are under $1,000 a month are now eligible

More details are expected.

For how long can I get CERB?

You can get CERB for 4 months.

Extended for 28 weeks

What is the frequency of CERB payments?

The payments will arrive every 4-weeks. So, you will get 4 payments in 16 weeks period.

How can I apply for CERB?

You will be able to apply online on the Canada Revenue Agency website using myAccount from April 6. You can also do so online or by phone.

When can I apply for CERB?

Application for CERB will open on April 6, 2020. Due to the expected application load, you will be able to apply on certain dates depending on your month of birth.

January to March can apply on April 6, April to June on April 7, July to September on April 8 and October to December on April 9.

Follow the link here on how to apply.

How long will it take to get the money?

You can get your payment within 10-days of applying.

What is a self-employment Income for CERB?

Self-employment income for tax purposes is a “net” business income as reported on your T1 Income tax return. Please do not consider your Gross income as self-employment income for this purpose. As per the requirement, you must have $5,000 of income in 2019 or the past 12 months. Even if you did not have 5,000 income in 2019, you will be still eligible if you have the same in self-employment income in the first two and half months of 2020.

Would I qualify for CERB if I get a salary or dividend from my corporation?

If you withdraw the salary from your corporation, Yes you might be covered. Since the CERB Act defines the worker as mentioned above, it does not appear that individuals who draw dividends from their corporations will be covered. However, it’s an evolving situation and there might be other options for these situations, we shall update this post if it changes in the future.

Important update: April 6, 2020

If you draw dividends from a CCPC, it could be considered towards $5000 eligibility requirement. A dividend from a Canadian Controlled Private Corporation which is paid out of income taxes at a small business income tax rate. 

READ: What is a “Non-Eligible” dividend? Note that a non-eligible dividend is what makes small business owners eligible.

Is dividend income eligible for CERB?

The dividend is not a self-employment income. Dividends are investment income. Owner-managers who are drawing their income as dividends from corporations are not eligible for CERB. CERB is for individuals with employment and self-employment income. The case might be different for those who pay themselves salaries from their corporations.

Important update: April 6, 2020

If you draw dividends from a CCPC, it could be considered towards $5000 eligibility requirement. A dividend from a Canadian Controlled Private Corporation which is paid out of income taxes at a small business income tax rate. 

Can an International Student or Temporary workers apply for CERB in Canada?

In order to be eligible for CERB, the worker must be a Canadian citizen or permanent resident. International students and temporary foreign workers might be eligible if other criteria are met.

Can I apply for CERB if I’m eligible for EI?

You can only get benefits from one program, even if you qualify both for CERB and EI. If you already get EI benefits, CERB is not for you.

However, you might be able to apply for CERB and EI consecutively. You can receive your EI benefits for 15-weeks and then see if you qualify for EI. If you do, you can place your application.

What will be the duration of the CERB program?

The program is expected to run from March 15 to October 3, 2020.

I am not laid off by Employer, am I still eligible for CERB?

Yes. Only if you do not have employment income from that employer. In other words, you are still an employee of the business but not getting paid. In case, if you get some employment income, even for reduced hours, you will not be eligible.

Can I apply for CERB if my EI application is not processed?

Your application might be processed under CERB in the current scenario, even if you applied for EI benefits.

We are updating this article on a regular basis. For other relief options for small businesses during COVID-19, please visit our page for more information.

What if I have other income, am I still eligible for CERB?

There must be no employment income, self-employment income or EI income for at least 14 consecutive days within the initial 4-weeks. Even if you have $100 in employment or self-employment income, you are not eligible.

I left my job in February and looking for Job, am I also eligible for CERB?

No, If you left your job to search for better opportunities or plan to do a job and cannot find a job, CERB is not for you. In order to be eligible for CERB, you must have stopped working because of COVID-19 related causes.

The above post is for information purposes only, some definitions might have been modified to simplify it for the general public. You should refer to the legislation, CERB Act (Bill C-13). Further, we do not provide any sort of legal advice and are limited to tax and accounting advice only. We are experiencing a large number of calls and chat requests for inquiries about the CERB, and we do not have enough resources due to Covid-19 to respond to each and every inquiry about this post. Kindly revisit the page for more information.

Maroof HS CPA Professional Corporation is an Ontario CPA firm providing individual income tax services and corporate tax services in Canada and the US. Reach to us for more information on how can we help you.

Have some questions about the CERB?

Join the discussion on Facebook by clicking the “Comment”.

We try to answer as many questions as we can. The discussion and response to your questions can only be provided in the comments section, do not send indirect messages.

Despite our wishes and intention, due to the limitation of resources, we can not provide any phone or email advice related to CERB or other programs except for our current clients. Please do not send email, call our office, or leave direct messages on our website. We bring the information and simplify it for you but we do not have resources to answer the calls or direct messages, so kindly respect this. 

A critical update for CERB:

Dividends were not previously listed as a source of income which can qualify owner-managers…

Posted by Maroof HS CPA Professional Corporation on Monday, April 6, 2020

If you are a wage earner, self-employed, freelancer or earning income from your small business, you might be eligible…

Posted by Maroof HS CPA Professional Corporation on Monday, March 30, 2020

Maroof Hussain Sabri

Maroof Hussain Sabri

Maroof is a CPA, CA in the province of Ontario and Alberta in Canada. He is also a licensed CPA from North Dakota in the United States. He lives in Toronto.

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Maroof Hussain Sabri

Maroof Hussain Sabri

Maroof is a CPA, CA in the province of Ontario and Alberta in Canada. He is also a licensed CPA from North Dakota in the United States. He lives in Toronto.

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5 thoughts on “Canada Emergency Response Benefit CERB – Common Questions”

  1. I have received a letter from the CRA to return the CERB. They are saying self-employment income is net and I used gross to estimate. Can you help me, please?

    1. Maroof Hussain Sabri

      Hi Sofia, self-employment income is always reported as “net”. This is the income that goes to your personal income taxes and then taxed. You should check your Jan to Mid March 2020 income, you may meet the “past 12 months” criteria to meet the threshold.

  2. Hi, in regards to the CERB, I received a letter from CRA to return the payment. I have made more then $5000+ net income in 2019 Jan-March but the employment income was made from overseas, I have filed this income in my 2019 tax return. Does NR employment income makes you not qualify for the CERB? I moved back to Canada in August 2019 and now a resident.

    1. Maroof Hussain Sabri

      hi Ashley, NR employment income is not a Canadian employment income. But i can see why you got letter. You moved back in August 2019 so your Jan to March 2019 income is not reported on tax return (as taxable). Also an imnportant eligibility requirement is that you “must” have lost the job due to Covid-19. If you were looking for job, you are not eligible for the job. Further, self employment/employment income requirement is for 2019 or “past 12 months”, means if you earned income in first 2.5 months of 2020, you are okay. For example, someone took a job at the beginning of Jan or February and made 5k until the pandemic hit, that one is eligible for CERB.

  3. I feel this is one of the most important info for me. And i am happy reading your article. However wanna remark on some common issues, The site taste is great, the articles is in point of fact excellent : D. Good job, cheers

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