Backgrounder:  The COVID-19 Response Measures Act

Notice for the Canada Recovery Benefit (CRB) and the eligibility criteria (update as of October 23rd)

The CRB is available for those who are not employed or self-employed for reasons related to COVID-19 and who meet the other eligibility criteria. For more information, please visit https://www.canada.ca/en/services/benefits/ei/cerb-application/transition/questions.html

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On September 28, 2020, the Minister of Employment, Workforce Development and Disability Inclusion, Carla Qualtrough, introduced legislation to introduce three temporary recovery benefits to support Canadian workers who are unable to work due to COVID-19. Bill C-4, the COVID-19 Response Measures Act (the Act), received Royal Assent on October 2, 2020. The legislation allows the Government of Canada to support Canadian workers through the next phase of the recovery, and to avoid a gap in coverage after they have received their last Canada Emergency Response Benefit (CERB) payments.

The Act creates three new temporary Canada Recovery Benefits to provide income support to Canadian workers while promoting economic recovery with measures that encourage people to return to work. These include the:

Canada Recovery Sickness Benefit (CRSB)
Canada Recovery Caregiving Benefit (CRCB)
Canada Recovery Benefit (CRB)

Canada Recovery Sickness Benefit

The new Canada Recovery Sickness Benefit will provide $500 per week, for up to two weeks (available in two one-week periods), effective September 27, 2020 until September 25, 2021 for workers who are unable to work because they contracted COVID-19, self-isolated for reasons related to COVID-19, or have underlying conditions, are undergoing treatments or have contracted other sicknesses that will make them more susceptible to COVID-19. This new benefit fulfils the Government’s commitment as part of the Safe Restart Agreement with provinces and territories to provide up to two weeks of sick leave to all Canadian workers in the context of COVID-19. It also encourages Canadian workers to stay home if they are sick or may be sick in order to promote the health and safety of Canadians and workplaces during this ongoing pandemic.

The benefit will be available to residents in Canada who were present for the period in which they were unable to work and:

• Are at least 15 years of age on the first day of the period for which they are applying for the benefit;
• Have a valid Social Insurance Number (SIN);
• Are employed or self-employed at the time of the application;
• Earned at least $5,000 in 2019 or 2020, or in the 12 months preceding the day of their application;
• Are not in receipt of paid leave during the period claimed; and
• Are unable to work for at least 50% of the time that they would have otherwise worked or devoted to their work in the week for which they claim the benefit, because:
  • They are sick with or may have contracted COVID-19; or,
  • They have isolated themselves on the advice of their employer, a medical practitioner, a nurse practitioner, a person in authority, a government or a public health authority for reasons related to COVID-19; or,
  • They have underlying conditions, are undergoing treatments or have contracted other sicknesses that, in the opinion of a medical practitioner, nurse practitioner, person in authority, government or public health authority, would make them more susceptible to COVID-19.

Workers will not be required to have a medical certificate to qualify for the benefit. Workers could not claim the Canada Recovery Sickness Benefit and receive other paid sick leave for the same benefit period.

Workers will apply after the one-week period in which they are seeking income support and attest that they meet the requirements. The benefit is taxable, with taxes removed at source to reduce the amount of tax owed at the end of the year.

Additional information on the Canada Recovery Sickness Benefit and its eligibility criteria can be found at Canada.ca.

Canada Recovery Caregiving Benefit

The new Canada Recovery Caregiver Benefit will be effective from September 27, 2020 to September 25, 2021, and will provide $500 per week, for eligible workers. Households can apply for up to 26 weeks, available in one-week periods.

The closure of schools, daycare and day program facilities to prevent the spread of COVID-19 has meant that many Canadians have been unable to work because they needed to provide care to children or support to family members who require supervision. 

The benefit will be available to residents in Canada who were present for the period in which they were unable to work and:

• Are at least 15 years of age on the first day of the period for which they are applying for the benefit;
• Have a valid Social Insurance Number (SIN);
• Are employed or self-employed at the time of the application;
• Earned at least $5,000 in 2019 or 2020, or in the 12 months preceding the day of their application;
• Are not in receipt of paid leave during the 1-week period claimed; and
• Are unable to work for at least 50% of the time that they would have otherwise worked or devoted to their work in the week for which they claim the benefit, because they had to care for a child under the age of 12 or another family member who requires supervised care:
  • Because their school, daycare, day program, or facility that they normally attend is unavailable, closed or open only certain times or for certain individuals; or
  • Because the care services or the person that usually cares for the child or family member is not available due to COVID-19; or,
  • Because they are sick and/or have been directed to quarantine for reasons related to COVID-19; or,
  • Because they are at high risk of serious health complications if they contracted COVID-19.

A household is entitled to a maximum of 26 weeks of the Canada Recovery Caregiving Benefit. If two or more persons reside in the same household, the benefit can be shared among eligible workers but only one of them may be paid a Canada Recovery Caregiving Benefit for any particular week.

Workers will apply after the one-week period in which they are seeking income support and attest that they meet the requirements. The benefit is taxable, with taxes removed at source to reduce the amount of tax owed at the end of the year.

Canada Recovery Benefit

The new Canada Recovery Benefit will be effective from September 27, 2020 to September 25, 2021. It will provide a benefit amount of $500 per week (available in two-week periods) for up to 26 weeks for those who have stopped working and who are not eligible for EI, or had their employment/self-employment income reduced by at least 50% due to COVID-19. These individuals may still require income support if they continue to be unable to return to work due to COVID-19 or had their income reduced relative to pre-COVID-19 pandemic (attestation-based).

The benefit will be available to residents in Canada who were present for the period in which they were unable to work and:

• Are at least 15 years of age on the first day of the period for which they are applying for the benefit;
• Have a valid Social Insurance Number (SIN);
• Have stopped working due to the COVID-19 pandemic and are not eligible for EI or are working and have had a reduction of at least 50% in their employment/self-employment income for reasons related to COVID-19;
• Are available and looking for work, and who must accept work where it is reasonable to do so;
• Had employment and/or self-employment income of at least $5,000 in 2019 or in 2020, or in the 12-month period prior to their first application for the Canada Recovery Benefit;
• Have not quit their job voluntarily, unless it was reasonable to do so; and,
• Have not rejected a reasonable job offer, rejected a request to resume work or failed to resume work if self-employed where reasonable to do so.

To encourage claimants to return to work, they will 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, to ensure that the benefit targets those who need it most, claimants will need to repay some or all of the benefit through their income tax return if their annual net income, excluding the Canada Recovery Benefit payment, is over $38,000. In other words, claimants will need to repay $0.50 of the benefit for each dollar of their annual net income above $38,000 in the calendar year up to a maximum of the amount of benefit they received.

This means that for a worker who received 10 weeks of the Canada Recovery Benefit in 2020 for a total of $5,000, they will have to repay all of the benefit if their net income exceeded the threshold by $10,000 (twice the benefit payment amount). In this example, the worker will have to repay the full benefit amount if their net income was greater than $48,000 (not including the Canada Recovery Benefit) in 2020.

How to apply for Recovery Benefits

As announced on September 25, 2020, the new Canada Recovery Benefits will be delivered by the Canada Revenue Agency (CRA). The CRA will open applications for the Canada Recovery Sickness Benefit and the Canada Recovery Caregiving Benefit on October 5 and for the Canada Recovery Benefit on October 12. Eligible individuals will be able to apply for recovery benefits online through the CRA’s My Account portal or by phone through its automated phone line. Eligible individuals can get ready to apply by signing up for CRA’s My Account portal, ensuring that their personal information with the CRA is up-to-date, and registering for direct deposit.

The attestation-based application process for the new temporary benefits will have more robust verification measures upfront than the Canada Emergency Response Benefit (CERB). Applicants will also experience different validation checkpoints to ensure they only receive the benefits to which they are entitled. For more details on how and when Canadian workers can get ready to apply, visit: www.canada.ca/coronavirus.

Payments will be delivered within the CRA’s usual service standard of 3 to 5 business days by direct deposit and within 10 to 12 business days by cheque.  

Unlike the CERB, clients will only be able to apply after the two-week period for which they are seeking benefits has concluded. This will help ensure that people are getting the benefits for a period for which they are entitled, and avoid the need to repay benefits. 

EI Flexibility

Of the almost 9 million people who have received the CERB since March, we anticipate close to 4 million people will still require some income support.

A set of temporary of measures were put in place on September 27, 2020 to facilitate access to EI; these measures are complementary to, but not included in, the Act. Approximately 2.8 million CERB recipients will be transitioned to EI regular benefits, including over 400,000 workers who would not have qualified for EI without these measures. These measures include:

• An hours credits;
  
• A minimum benefit rate of $500 per week, or $300 per week for extended parental benefits;
• At least 26 weeks of regular benefits;
• A minimum unemployment rate of 13.1% applies to all regions across Canada; and,
• An EI premium rate frozen at the 2020 premium rate for two years.

• 300 insurable hours for claims for regular and work sharing benefits (job loss); and,
• 480 insurable hours for claims for special benefits (sickness, maternity/parental, compassionate care or family caregiver).

• The number of hours of insurable employment a claimant needs to have accumulated in their qualifying period to be eligible for EI regular benefits – ranging from 420 to 700;
• The number of weeks of EI regular benefits a claimant may be entitled to – ranging from 14 to 45; and,
• The number of best weeks of earnings that will be used to establish their weekly benefit rate – ranging from 14 to 22.

• 900-series Social Insurance Numbers holders;
• self-employed workers who received benefits through Service Canada; and,
• Canadian workers who received the CERB from the CRA but could have 120 hours of insurable and meet the other eligibility criteria.