Over 8 million individuals have applied for the Canadian Emergency Response Benefit (CERB) since its inception in March 2020. The benefit was introduced to help people who are impacted by widespread business and school closures due to COVID-19. And it was recently extended from 16 weeks to 24, now lasting until October 3, 2020. 

There’s been a lot of debate about CERB and its effectiveness in curbing the economic impact of the pandemic. But if you’ve lost your job or have taken a pay cut because of COVID-19, here’s what you need to know about qualifying for benefits and how it may affect your finances. 

Do I qualify? 

If you lost your job because of COVID-19 or are making less than $1,000 in a four-week period as of March 15, 2020, you’re generally eligible for CERB. These guidelines include those who have used up their Employment Insurance (EI) benefits, those who are sick and quarantined and parents who must stay home to take care of their children because of COVID-19. In order to receive your benefit for each month you qualify, you will need to reapply during each four-week period. 

Unfortunately, if you’re a seasonal worker, a student who can’t find a summer job or someone who was already unemployed without EI benefits, you’re not eligible to receive CERB. Additionally, you are required to have made at least $5,000 in the last year. 

How will my finances be affected if I receive benefits? 
When you apply for CERB, you’ll receive $2,000 for each four-week period, up to 24 weeks. It’s important to note that this payout is taxable income but will not be taxed at the source like EI benefits. You will have to report it when you file your 2020 taxes.

Another important thing to note is that CERB is an emergency benefit, which means that it can be paid out just a few days from the time you submit an application, which means you may receive money before it’s determined if you actually qualify. If you don’t actually qualify for the benefit, you will need to return the payment. In addition, if you apply for both EI and CERB after March 15, you may receive a double payment and will need to pay half back. The Canada Revenue Agency will contact you if they determine you need to return any payments. 

Should I apply for CERB? 

If you’ve lost your job or most of your income due to COVID-19, it’s a good idea to take advantage of CERB for as long as it lasts. But if you’re still employed and making over $1,000 per month, you won’t be eligible and shouldn’t apply. 

There’s no clear answer to how CERB and other emergency benefits will affect the Canadian economy as we move forward from the pandemic. But a financial professional can help you navigate your options for unemployment benefits and advise you on how to care for your financial health at all times. 

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