Do You Need to Repay Your CERB Payments?

Do You Need to Repay Your CERB Payments?

Written by Lisa Rennie
Fact-checked by Caitlin Wood
Last Updated December 17, 2021

The ongoing COVID-19 pandemic has caused many Canadians to suffer financially. To help the situation, the Canadian government introduced a handful of financial assistance programs, including the Canada Emergency Response Benefit (CERB)

Nearly 9 million Canadians applied for CERB from the start of the pandemic in March 2020 through to October 2020 when the program ended, which translated into just over $81.6 billion paid out in CERB benefits. 

However, while many Canadians who received CERB payments were indeed eligible for these funds, others were not. The question is, will those who already received CERB payments, despite being ineligible. have to repay their CERB payments?

Check out how the CRB is replacing the CERB.

Will You Need to Repay the CERB?

CERB payments are not meant to be paid back to the government but instead are meant to help out Canadians who have found themselves in a dire financial situation as a result of the COVID-19 pandemic. However, there may be circumstances in which these monies may have to be repaid, such as the following:

Double Payment

Applying for CERB should only have been done either through Service Canada or the CRA — not both. However, many Canadians ended up applying twice, whether inadvertently or purposely. 

Over the past few weeks, letters have been sent to Canadians who may have applied for CERB through both channels and have therefore been receiving double CERB payments. While immediate repayment was not required according to these letters, there was an indication that the amounts received in error would have to eventually be paid back. 

Find out if you can apply for CERB and EI.

Failure to Meet Eligibility Requirements

Perhaps you may not have been eligible at all to receive CERB. In this case, you may be required to pay back any CERB payments that you have received.

Time is of the essence for Canadians who need to ensure that their bills are covered, such as mortgage payments, rent, utilities, and groceries. When CERB was announced, there was simply no time to spare. Given this rushed situation, the Canadian government didn’t ask for any proof for eligibility to receive CERB payments at the time of application.

While these quick payments may have helped at that moment, the lack of vetting on behalf of the government could mean that many Canadians may have been paid far more than they were qualified to receive. 

In this case, any money over and above what you were eligible for will have to be repaid. 

Find out if your COVID-19 benefits are taxable.

Failure to File Your 2019 Taxes

One of the requirements to receive CERB was to have your 2019 taxes filed. If you failed to have these taxes filed, you may not be eligible for CERB. Any monies you’ve received, therefore, would have to be paid back. 

Learn how to file your income taxes if you received COVID-19 benefits.

CERB Repayment Methods

If you are one of the Canadians who has received a letter stating that you are required to repay some or all of your CERB payments, there are a few ways you can make these repayments.

Through The CRA

If you applied for CERB through the CRA, you can repay it directly to this government agency via the following channels:

  • Using CRA My Account (starting May 11)
  • By mail
  • Through online banking with your financial institution

Through Service Canada

If you applied for CERB through Service Canada, you can return your CERB payments as follows:

  • Through online banking with your financial institution
  • By mail with a cheque or money order

What happens if you get COVID-19 and can’t work in 2022?

What if I Can’t Afford to Repay my CERB Payments?

It’s possible that the money you received through CERB payments has already been spent, leaving you with little leftover to repay the government. On top of that, anyone who did not repay CERB payments that they were not eligible for by the end of 2020 will be expected to pay income on these amounts.  

But what if you can’t afford to return these payments?

Set up a payment arrangement with the CRA. Get in touch with the CRA to find out how much you’re required to pay back and whether or not it’s possible to set up a payment arrangement.

File for insolvency. For some Canadians, even an installment arrangement may not be enough to help, especially if they’re living paycheque to paycheque. In this case, the last resort may be to file for a consumer proposal or bankruptcy. This is an option if the CERB applications were made in error and were not done to fraudulently collect more. 

A consumer proposal involves working with creditors to repay less than the principal owed, while bankruptcy involves surrendering much of your assets to a Licensed Insolvency Trustee to relieve your debts.

Tips on Repaying Your CERB

If you have found yourself having to repay part or all of your CERB payments, here are a few tips to consider:

  • File your taxes early. Get on top of your taxes and consider filing them early to give yourself enough time to pay back the amount owed and to look into all repayment options available to you. 
  • Speak with a financial advisor or tax professional. Get in touch with a tax accountant or lawyer to find out if any adjustments are possible to your 2019 tax return. 
  • Repay CERB early. The sooner you repay your CERB overpayment, the better. This may help to avoid any tax implications.
  • Come up with a workable budget. Review your budget in detail to see how to fit in your CERB repayments with all your other financial obligations. 

CERB Repayment FAQs

Do I have to repay my CERB if I got a letter from the CRA?

If you received a letter from the CRA regarding your CERB payment, that doesn’t necessarily mean that you automatically owe the government in CERB overpayment. It may just mean that the government is looking for additional information to help them determine whether or not you meet the eligibility requirements for CERB. 

Why has the government exempted some people from repaying the CERB?

The Canadian government announced that self-employed Canadians who were ineligible for CERB funds but received them in error will not have to repay this money if they earned a minimum of $5,000 in gross self-employment income in 2019 and met all other CERB eligibility criteria. If these self-employed Canadians already repaid their CERB overpayments, both the CRA and Service Canada will return these amounts.

If I get to keep my CERB, is it taxable? 

Yes, CERB payments are taxable. These funds must be included in your taxable income for 2020. The amount you could owe will be based on your marginal tax rate, as well as any other sources of income. 

Final Thoughts

Many people unknowingly may have applied for CERB in error, whether they applied through both the CRA and Service Canada, or whether they were ineligible at all. Regardless, most of these Canadians will likely have to repay what they owe to some degree. Anyone who may find it financially difficult to do so may want to get in touch with a financial advisor for guidance.

Rating of 5/5 based on 1 vote.

Lisa has been working as a writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same. She's used a variety of financial tools over the years and is currently growing her money with Wealthsimple, while stashing some capital in a liquid high-interest savings account so that she always has a financial cushion to fall back on. She's also been avidly using her Aeroplan TD credit card to collect as many Aeroplan points as possible to put towards her travels!

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