The Federal Government’s Transition Plan for CERB Recipients

This blog was prepared with the assistance of summer student Caileigh Rendek.

On August 20, 2020, the Federal Government announced its proposed plan to transition individuals receiving the Canada Emergency Response Benefit (“CERB”) to modified Employment Insurance (“EI”) benefits and other new programs.

Deputy Prime Minister and Finance Minister, Chrystia Freeland, announced plans to extend the CERB by four weeks, modify existing EI benefit rules and introduce three new one-year benefit programs to take effect on September 27, 2020, subject to parliamentary approval.

The new programs were approved by Parliament on October 2, 2020, as proposed under Bill C-4: An Act relating to certain measures in response to COVID-19, which received Royal Assent. Details respecting the extension of the CERB, modified EI eligibility rules and the temporary benefit programs are set forth below.

Extending the CERB and Modifying the EI Eligibility Rules

The first part of the federal transition plan extends the CERB by four weeks to a maximum of 28 weeks. This means that individuals who would have exhausted their CERB benefits at the end of August will now be able to access an additional four weeks of support. For more information on previous changes to the CERB, please see our previous blog here.

Second, on September 27, 2020, individuals who remain unable to work will transition to receiving a modified EI benefit if they meet the revised eligibility criteria. Access to EI is based on the number of insurable hours an individual has worked in the year prior to their application or since their last claim (normally 420 insurable hours for EI regular benefits or 600 insurable hours for EI special benefits such as sickness, maternity/parental, compassionate care, or family caregiver benefits). To increase access to EI, individuals will receive a one-time “credit” of insurable hours, effectively reducing the requirement to qualify for EI to 120 insurable hours worked in the prior year. Additionally, new EI claimants are eligible for a minimum benefit of $400 per week for regular benefits or $240 per week for special benefits, which is available for a minimum duration of 26 weeks.

With the temporary changes in the EI program, EI rates will be frozen for two years at their 2020 levels ($1.58 per $100 of insurable earnings for employees and $2.21 per $100 of insurable earnings for employers).

Returning to the EI program will allow claimants to benefit from the “Working While on Claim” rules, which allow eligible Canadians to keep receiving part of their EI benefits and all their earnings from work.

In addition, employers will once again be able to make use of registered Supplemental Unemployment Benefit (SUB) plans to provide support to their employees.

For EI sickness benefits, the waiting period and the medical certificate requirements have been waived in light of the continuing pandemic to encourage compliance with public health measures.

To note, the majority of eligible Canadians still receiving the CERB will be automatically transitioned into the EI program. Service Canada has indicated that they will be contacting all EI clients to confirm whether they need to apply or are being transitioned automatically, and clients can also verify the status of their claim in their My Service Canada Account.

New Benefit Programs

The Federal Government has also introduced three new taxable benefit programs that will be in effect for one year following the end of CERB payments, retroactive to September 27, 2020.

Canada Recovery Benefit

The Canada Recovery Benefit (“CRB”) is intended to support Canadians who have not returned to work or whose income has dropped by at least 50% due to the pandemic. Workers who are self-employed or are not eligible for EI and require income support are eligible for up to $500 per week for up to 26 weeks through the CRB.

The CRB is available to Canadian residents who:

  • are at least 15 years old and have a valid Social Insurance Number (SIN);
  • have stopped working due to the COVID-19 pandemic and are available and looking for work; or are working and have a reduction in their employment/self-employment income for reasons related to COVID-19;
  • are not eligible for EI;
  • had employment and/or self-employment income of at least $5,000 in 2019 or 2020; and
  • have not quit their job voluntarily.

Recipients of the CRB would need to apply after every two-week period they are seeking income support and must attest that they continue to meet the eligibility requirements.

Note that recipients are able to earn income from employment and/or self-employment while receiving the CRB so long as they continue to meet the other requirements noted above. However, claimants will be required to repay some or all of the CRB through their income tax return if their annual net income, excluding the CRB payment, is over $38,000.

Canada Recovery Sickness Benefit

The Canada Recovery Sickness Benefit (“CRSB”) was created to support the Government of Canada’s commitment to ensure that all Canadian workers have access to paid sick leave. Under this benefit, workers who are sick or must self-isolate for reasons related to COVID-19 are eligible to receive $500 per week for up to two weeks.

For the CRSB, a medical certificate is not required to qualify for the benefit. Claimants would need to have missed at least 60% of their weekly duties due to sickness from COVID-19 or self-isolation.

The CRSB is available to Canadian residents who:

  • are at least 15 years of age and have a valid SIN;
  • are employed or self-employed at the time of the application; and
  • earned at least $5,000 in 2019 or in 2020.

Claimants would also need to have a missed minimum of 50% of their scheduled work in the week for which they claim the CRSB. Claimants are not required to produce a medical certificate to qualify for the CRSB. Note however that workers cannot claim the CRSB and receive other paid sick leave for the same benefit period for which they apply.

Claimants must apply after the one-week period in which they are seeking the CRSB, and must attest that they meet the eligibility requirements.

Canada Recovery Caregiving Benefit

The Canada Recovery Caregiving Benefit (“CRCB”) is intended to provide support for eligible Canadians unable to work because they must care for a child under the age of 12 or family member because schools, day-cares or care facilities are closed due to COVID-19, or because the child or family member is sick and/or required to quarantine. Under this benefit, claimants are eligible to receive $500 per week for up to 26 weeks per household.

The CRCB is available to Canadian residents who:

  • are at least 15 years of age and have a valid SIN;
  • are employed or self-employed on the day immediately preceding the period for which the application is made;
  • have earned at least $5,000.00 in 2019 or in 2020;
  • have been unable to work for at least 50% of their normally scheduled work within a given week because:
    • they must take care of a child who is under 12 years of age:
      • because their school/daycare is closed or operates under an alternative schedule for reasons related to the pandemic;
      • who cannot attend school/daycare under the advice of a medical professional due to being at high risk of contracting COVID-19; or
      • because the caregiver who usually provides care is not available for reasons related to the pandemic; or
    • they must provide care to a family member with a disability or a dependent:
      • because their day program or care facility is closed or operates under an alternative schedule for reasons related to COVID-19;
      • who cannot attend their day program or care facility under the advice of a medical professional due to being at high risk if they contract COVID-19; or
      • because the caregiver who usually provides care is not available for reasons related to the COVID-19 pandemic.
  • are not in receipt of paid leave from an employer in respect of the same week; and
  • are not in receipt of CERB, EI, CRB, CRSB, short-term disability benefits, or workers’ compensation benefits in respect of the same week.

Claimants would apply after the period in which they are seeking income support and must attest that they meet the eligibility requirements.

The temporary recovery benefits program will be managed by the Canada Revenue Agency (CRA), and eligible Canadians will be able to apply online via CRA MyAccount.

The COVID-19 pandemic is creating novel challenges for organizations. MLT Aikins LLP is closely monitoring this evolving situation and can assist organizations in determining which benefits would be available to their employees during any particular layoff or leave of absence from employment.