CERB replaced with modified EI and newly announced federal benefits

By Nichole Mirwaldt and Jeff Smorang

Since March 2020, many Canadian workers have been unable to work for reasons related to COVID-19. In response, the Canadian government implemented the Canada Emergency Response Benefit (“CERB”), which provided for $2,000 per month to employed and self-employed Canadians directly affected by the pandemic. This program has been in place since March 15, 2020 and ended on September 26, 2020. Information regarding the CERB program can be found on the Government of Canada CERB page.

The Canadian government recognizes the need to continue to support workers that are impacted by the pandemic. Accordingly, the government intends to transition from the CERB to increased Employment Insurance (“EI”) and new recovery benefits.

Modified Employment Insurance

On September 25, 2020, the Canadian Government announced changes to make the EI program more flexible. The entire news release can be found here. The transition from CERB to modified EI will begin on September 27, 2020. EI will now be available to more Canadians who would not have qualified in the past. Canadian workers receiving EI are eligible for a taxable benefit at a rate of at least $500 per week, or $300 per week for extended parental benefits. Canadian workers claiming EI for job loss would be eligible for at least 26 weeks.

Under the flexible EI program, claimants may be permitted to keep part of their EI benefits while continuing to receive earnings from work. This will be governed by the Government of Canada, Working While on Claim rules.

The news release states that the majority of Canadians still receiving the CERB through Service Canada who are eligible for EI will be automatically transitioned. Workers can expect to be contacted by Service Canada to confirm whether they need to apply or are being transitioned automatically. Alternatively, workers can also verify the status of their claim in their My Service Canada Account.

EI payments become available to workers at the end of the two weeks that they are out of work. This will continue even where workers were receiving CERB. Workers that are currently receiving CERB and are switching to EI effective September 27, 2020, will be eligible for their first EI payment as of October 11.

For workers who are not eligible for EI, they may be able to receive support under the three new temporary recovery benefits (outlined below) to support Canadians who are unable to work for reasons related to COVID-19. These benefits have been proposed under new legislation that has not yet been passed.

Temporary Recovery Benefits

Bill C-2, An Act relating to economic recovery in response to COVID-19, was introduced on September 24, 2020. Bill C-2 introduces three new benefits that are intended to support Canadians during the pandemic. Subject to this legislation receiving Royal Assent, the new Benefits will become be effective beginning on September 27, 2020 and end on September 25, 2021. Specifically, the legislation includes:

A Canada Recovery Benefit (CRB)

The CRB will provide $500 per week for up to 26 weeks, to workers who are self-employed or are not eligible for EI and who still require income support. This is a taxable benefit that is provided in two-week periods beginning on September 27, 2020.

To be eligible for the CRB, applicants must attest to the following:

• They are at least 15 years old at the time of first application and have a valid Social Insurance Number (SIN);
• They were resident and present in Canada during the period they have applied for;
• They had income of at least $5,000 in 2019 (if applying for 2020) or in 2020 (if applying for 2021);
  • Income may come from employment income, self-employment, benefits paid under the Employment Insurance Act, allowances or money paid to a person under a provincial plan for pregnancy or child care.
• That they were not employed or self-employed for reasons relating to COVID-19, or that they are working but their average weekly income has been reduced by at least 50% relative to their average weekly income in 2019, 2020, or the 12-month period preceding the day of making the application;
• They are not eligible for EI;
• They have not quit their job voluntarily, unless it was reasonable to do so;
• They have not failed to return to their employment or self-employment when it was reasonable to do so and have not declined a reasonable offer to work for the application period;
• They are not receiving the Canada Recovery Sickness Benefit, Canada Recovery Caregiving Benefit or allowances/money under a provincial plan because of pregnancy or child care, during the same period they are seeking to receive the CRB; and
• That they have sought work during the application period and that they did not place undue restrictions on their availability for work whether as an employee or in self-employment.

Claimants must apply for CRB after every two-week period for which they are seeking income support and must attest that they continue to meet the above eligibility requirements. Applications must be made within 60 days of the two-week period to which the benefit relates. For example, if an employee is claiming for the period of October 1, 2020 – October 15, 2020, applications must be made within 60 days of October 15, 2020.

Claimants may be able to earn income from employment and/or self-employment while receiving the benefit, as long as they continue to meet the other requirements. However, claimants may be required to repay some, or all, of the amount they received under CRB. A claimant whose income is more than $38,000 for 2020 or 2021 is required to pay an amount equal to 50 cents for every dollar of income earned in that year above $38,000, up to and including the amount of CRB received by them in that year.

A Canada Recovery Sickness Benefit (CRSB)

The Canada Recovery Sickness Benefit (CRSB) provides $500 per week (for a maximum of 2 weeks) to workers who are unable to work because they are sick or they must self-isolate due to Covid-19. This is a taxable benefit that is provided in one-week periods beginning on September 27, 2020. The benefit would be available to claimants who attest to the following:

• They are at least 15 years of age and have a valid Social Insurance Number (SIN);
• Were resident and present in Canada for the time period they are applying for the CRSB;
• They were employed or self-employed at the time of the application
• They had income of at least $5,000 in 2019 (if applying for 2020) or in 2020 (if applying for 2021);
  • Income may come from employment income, self-employment, benefits paid under the Employment Insurance Act, allowances or money paid to a person under a provincial plan for pregnancy or child care.
• They have been unable to work for at least 50% of the time they would have otherwise worked within the week, or they have as a self-employed person reduced the time devoted to their work by at least 50% of the time they would have otherwise worked in the week;
• They are not receiving the CRB, Canada recovery caregiving benefit or allowances/money under a provincial plan because of pregnancy or child care, during the same period they are seeking to receive the CRSB; and
• That they have not been granted paid leave or been paid under a sickness benefit plan for the period they are claiming the CRSB.

Applications must be made within 60 days of the end date of the week to which the application relates.

A medical certificate is not required to qualify for the benefit. The legislation is not clear on whether an employee/employer could elect to take CRSB instead of available banked sick leave. The only restriction is that workers cannot claim CRSB and collect other paid sick leave for the same benefit period. Arguably, an employee could apply for CRSB despite having available sick time. We will continue to monitor this issue as more information becomes available.

A Canada Recovery Caregiving Benefit (CRCB)

The CRCB is available to claimants of $500 per week for up to 26 weeks per household, 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.  This is a taxable benefit that is provided in one-week periods beginning on September 27, 2020. To be eligible, the claimant must attest to the following:

• They are at least 15 years of age and have a valid Social Insurance Number (SIN);
• Were resident and present in Canada for the time period they are applying for the CRCB;
• They had income of at least $5,000 in 2019 (if applying for 2020) or in 2020 (if applying for 2021);
  • Income may come from employment income, self-employment, benefits paid under the Employment Insurance Act, allowances or money paid to a person under a provincial plan for pregnancy or child care.
• They have been unable to work for at least 50% of the time they would have otherwise worked within the week, or they have as a self-employed person reduced the time devoted to their work by at least 50% of the time they would have otherwise worked in the week because they cared for a child under 12 years of age (on the first day of the week for which the benefit is being claimed) or a family member who requires supervised care:
  • because the child or family member contracted or might have contracted COVID-19 or was in isolation for reasons related to COVID-19;
  • because their school or daycare, or their day program or care facility, is closed or operating under an alternative schedule for reasons related to COVID-19;
  • who cannot attend their school or daycare, or 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 COVID-19;
• That they are not receiving the CRB, CRSB or allowances/money under a provincial plan because of pregnancy or child care, during the same period they are seeking to receive the CRSB; and
• That they have not been granted paid leave or been paid under a plan that provided for payment for the care or support of another person during the period they are claiming CRCB.

Applications must be submitted within 60 days after the end of each week to which the benefits relate. The benefit is available for a maximum of 26 weeks per household. If two or more persons reside in the same household, only one of them may be paid a Canada Recovery Caregiving Benefit for any particular week.

Should you have any questions about your benefits, we recommend that you reach out to a member of our Employment and Labour Group.