The government has begun reviewing the payments it has sent to nearly nine million Canadians through the Canada Emergency Response Program (CERB) – and a large proportion of those recipients are being told they must pay back some or all of the money received.
Some have to repay monies received through the program because they were not eligible for the amount received and others because they received an upfront payment that was never reconciled. Proponents are calling on the government to forgive that debt, which they say will debilitate many low-income workers.
A Canadian tax authority expression Released on May 10, the agency said it had begun sending Notices of Redetermination (NoRs) to Canadians who were found to be ineligible for some or all of the CERBs they had received.
It’s not yet clear how many people will receive these notifications. According to Employment and Social Development Canada (ESDC), verification work will continue over the next four years as new data such as tax returns and employment records become available.
This is in addition to the promissory notes (NoDs) that ESDC began sending in November 2021 to Canadians who had received an accelerated $2,000 upfront payment at the start of the CERB to be applied to a later period. Anyone who hasn’t stayed with CERB long enough to match that upfront payment will receive one of those letters, according to the CRA, with the last ones going out in July — about 1.7 million people in all.
Barry Marsh, a member of the Etobicoke chapter of advocacy group ACORN, said he had heard from a number of community members who had received CERB payback letters and didn’t have the money to comply.
At the beginning of the pandemic, there was a lot of confusion about CERB applications and eligibility, Marsh said. Some people might have gotten more than they were entitled to without realizing it, he said, but that money has long since been used to pay rent or other necessities.
Now, even $2,000 in debt is enough to induce some low-income people to take out payday loans and could put some roofs over their heads, Marsh said.
“Low-income people have it really tough,” he said.
With inflation at record highs, Marsh believes the government should treat CERB overpayments as a grant. He said the majority of people facing a refund did not contact CERB to abuse the system.
Anyone who is told they are not eligible for some or all of their CERBs and believes this is incorrect should contact the CRA to validate their claim, the agency said.
“The government has made it clear throughout the pandemic that while there will be no penalties for those who have claimed these benefits in good faith, individuals will be required to return benefit payments to which they were not entitled,” the spokesman said in an E -Mail .
The Agency may offer flexible or deferred payment options for those unable to pay in advance, pursuant to a CRA Tax Tip Post published on May 11th.
These notices “mark a transition in (the CRA’s) compliance and collection activities,” the CRA spokesperson said, and are part of a “larger compliance effort” for individual COVID-19 benefits.
Deena Ladd, executive director of the Workers’ Action Centre, agreed with Marsh that the government should waive CERB overpayments. Many workers continue to struggle with low wages, precarious work and debt, she said.
“Getting this message in the mail is probably an incredibly devastating blow,” Ladd said.
The early days of the pandemic were a confusing time for many, she said. The government did the right thing by rushing payments, but as a result some mistakes were made – by applicants but also by the government, Ladd said.
For example, self-employed CERB recipients were told they would have to pay back thousands of dollars after the government released conflicting information about eligibility. It later admitted the mistake and forgave that debt.
The Government’s Fall 2020 Economic Statement pledged $260 million over four years beginning in 2021 to support the ESDC and CRA in detecting and addressing instances of CERB-related misrepresentation, abuse or fraud.
Alex Thoms was out of work for around four weeks at the start of COVID-19 due to a layoff from his retail job. Like many Canadians at the time, he was confused about how to apply for financial assistance and applied for both CERB and Employment Insurance (EI).
When he received both, he realized his mistake and set the EI funds aside so he could repay them if requested. He used the $2,000 he received in CERB funds — $500 for each week he was unemployed. And when he received notice of his EI overpayment in 2021, he returned the money he had set aside.
But this year during tax season, Thoms received one of 1.7 million notices saying he owed the government $2,000 for the upfront payment. He checked his bank account history to make sure he hadn’t received an additional $2,000 in CERB — he hadn’t — and then called the CRA. But despite his explanation, he said the agent told him he had to pay.
“I got four weeks off, I got $2,000,” he said.
Thoms is sure there was a mistake but is putting money aside in case the appeal he sent out in April doesn’t work.
Steve Wilder, who was an electrical apprentice during COVID-19, said he only received a $2,000 CERB payment while he was unemployed for a few weeks early in the pandemic. So he was shocked when he recently received a letter saying the $2,000 was an advance that he had to pay back.
Wilder, who is preparing to move, said the money will be difficult to repay in the short term. He’s still not sure how much he was actually entitled to – it’s been more than two years, so he assumed the government would have notified him much sooner if he wasn’t eligible.
Back then, the money was a relief, he said. Now it’s a source of concern.