The government has started verifying the payments it sent to nearly nine million Canadians through the Canadian Emergency Response Program (CERB) – and many of those recipients are being told they owe repay some or all of the money they received.
Some have to return the money received under the program because they were not eligible for the amount received and others because they received an advance payment that was never reconciled. Advocates are calling on the government to cancel these debts, which they say will be debilitating for many low-income workers.
A Canada Revenue Agency statement published on May 10 said the agency had begun sending notices of redetermination (NoR) to Canadians who were found to be ineligible for some or all of the CERB they received.
It is not yet known how many people will receive these notices. According to Employment and Social Development Canada (ESDC), verification work will continue over the next four years as new data such as income tax returns and records of employment become available.
This is in addition to the Notices of Debt (NoD) that ESDC began sending in November 2021 to Canadians who received an accelerated advance payment of $2,000 at the start of CERB, which was to be applied to a later period. Anyone who hasn’t stayed on CERB long enough to reconcile this advance payment will receive one of these letters, according to the CRA, with the last ones sent in July – about 1.7 million people in total.
Barry Marsh, a member of the Etobicoke chapter of the advocacy group ACORN, said he heard from a number of community members who had received reimbursement letters from CERB and did not have the money to conform.
At the start of the pandemic, there was a lot of confusion about CERB applications and eligibility, Marsh said. Some people may have received more than they were entitled to without realizing it, he said, but that money has long been gone, used to pay rent or other necessities.
Now, even $2,000 in debt is enough to entice some low-income people to use payday loans, and could cost some the roof over their heads, Marsh said.
“Low-income people are really struggling,” he said.
With inflation at record highs, Marsh thinks the government should treat CERB overpayments like a subsidy. He said the majority of those facing reimbursement did not apply to CERB with the intention of abusing the system.
According to the agency, anyone who is told they were ineligible for all or part of their CERB and who thinks this is untrue should contact the CRA to validate their claim.
“The government has been clear throughout the pandemic that while there will be no penalties for those who have applied for these benefits in good faith, individuals will be required to repay the benefit payments they have received and to which they weren’t entitled,” the spokesperson said in an email. .
The agency may offer flexible or deferred payment options for those who cannot pay upfront, depending on a CRA Tax Advice Station published on May 11.
These notices “mark a transition in (the CRA’s) compliance and collection activities,” the CRA spokesperson said, and are part of a “wider compliance effort” for individual benefits. related to COVID-19.
Deena Ladd, executive director of the Workers’ Action Center, agreed with Marsh that the government should forgive CERB overpayments. Many workers continue to struggle with low wages, precarious work and debt, she said.
“Receiving this notice 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 the payments, but as a result some mistakes were made — by the candidates, but also by the government, Ladd said.
For example, self-employed CERB recipients were told they would have to repay thousands of dollars after the government released inconsistent eligibility information. Later he admitted the mistake and forgave those debts.
The government’s 2020 Fall Economic Statement pledged $260 million over four years starting in 2021 to help ESDC and the CRA detect and address cases of misrepresentation, abuse, or fraud related to CERB.
Alex Thoms was out of work for about four weeks at the start of COVID-19, due to a temporary layoff from his retail job. Like many Canadians at the time, he didn’t know 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 aside the EI funds so he could pay them back on demand. He used the $2,000 he received in CERB funds — $500 for each week he was away. And when he received notice of his 2021 EI overpayment, he returned the funds 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 prepayment. He checked his bank account history to make sure he hadn’t received an extra $2,000 in CERB — he hadn’t — then called the CRA. But despite his explanations, he said the officer told him he had to pay.
“I was away for four weeks, got $2,000,” he said.
Thoms is certain there was a mistake, but is putting money aside in case the appeal he sent in April doesn’t work.
Steve Wilder, who was an apprentice electrician when COVID-19 hit, said he only received one CERB payment of $2,000 while off work for a few weeks at the start of the pandemic . So he was shocked to recently receive a letter saying the $2,000 was an advance that he had to repay.
Wilder, who is set to move, said repayment would be difficult in the short term. He still doesn’t know how much he was actually eligible for – it’s been over two years so he had assumed that if he wasn’t eligible the government would have told him much sooner.
At the time, money was a relief, he says. Now that is cause for concern.