As a response to the COVID-19 pandemic, the Canadian government has introduced financial support payments known as the Canada Emergency Response Benefit (CERB). The purpose of these support payments is to provide financial assistance to workers who lost their income from the COVID-19 crisis.
If you’ve incurred a wage garnishment on your wages before losing your job, you might be wondering whether these support payments are subject to a garnishment too. In general, the answer is no, but there are exceptions.
What Is Wage Garnishment?
If a consumer is in debt to a lender, the lender may take the borrower to court to collect the debt through wage garnishment. A wage garnishment allows the lender to take money directly from the borrower’s wages or paycheque. In addition, if another party holds the borrower’s wages, the lender can take it directly from the third party. If a wage garnishment judgment has been made against you, your wages will be referred to as garnished.
Can My Canada Emergency Response Benefit (CERB) Be Garnished?
The CERB payments have been made possible under the COVID-19 Emergency Response Act. This act states the following:
- CERB is not considered income or property during a bankruptcy
- CERB cannot be assigned or given as collateral for financing
- CERB cannot be garnished
- CERB is not garnishable for support payments
- CERB cannot be kept by right of set-off by the government for their debts
To summarize, you are allowed to keep the full amount of CERB support payments and they cannot be garnished. The reasoning for this is that the support payments are meant to provide financial assistance to Canadians during the economic crisis resulting from the COVID-19 lockdown. Therefore, the payments should benefit the recipient solely, not lenders.
Keep in mind that if you owe your bank money, they can still be offset by your bank. Once the CERB payment is deposited into your account, it is considered cash which is subject to legal right offset from your bank.
Despite the fact that your CERB payments cannot be garnished, creditors may still try to collect payment. Do not let them collect money from your CERB payments, this money is meant to help you through this difficult financial time.
Beware Of Scammers
Scammers have begun to exploit the public fear surrounding COVID-19, unfortunately. You may notice increased calls to your home or cell phone in addition to fraudulent emails containing false information about COVID-19. Do not respond to any communication asking you to make a payment, click on a link, send personal information, send banking information or send passwords. If it seems phishy – it probably is!
Learn more about dealing with scams during the COVID-19 pandemic.
Frequently Asked Questions
My wages were being garnished at my job, but I lost my job due to COVID-19. Will the garnishment continue if I receive CERB?
What kind of wages cannot be garnished?
I cannot keep up with my payments due to COVID-19. Should I apply for bankruptcy or a consumer proposal right now?
CERB Payments And Your Financial Health
The entire purpose of CERB payments is to help Canadians financially throughout the COVID-19 pandemic. Allowing these payments to be garnished would be detrimental. If you’re eligible for CERB payments, be smart with your money during this challenging economic time.
